Stocks end mixed on worries about earnings, oil

While the market's major indexes showed modest losses, the number of stocks advancing outpaced decliners by about 2 to 1 on the New York Stock Exchange, and by about 4 to 3 on the Nasdaq Stock Market.

The tame session unfolded as oil rose on concerns that the threat of new sanctions against Iran over its nuclear program could escalate tensions in the Middle East. Light, sweet crude rose $2.16 to settle at $131.04 a barrel on the New York Mercantile Exchange.

The rise in oil offset initial market enthusiasm after Bank of America Corp. posted results that beat expectations, raising hope the credit crisis might be easing for the nation's biggest retail banks. The second-largest U.S. bank by assets reported that higher investment banking and record revenue helped drive earnings during the second quarter.

With Bank of America's results, four of the nation's five biggest banks have now reported better-than-expected earnings, and that's raising hopes that the financial sector is starting to recover from the year-old credit crisis.

Still, "with crude trading up near $130, and a big advance last week, some investors are taking chips off the table," said Jim Herrick, manager of equity trading at Baird & Co. "We're going to be in a tight trading range this week based on earnings and oil prices. I expect more of the same."

The market was also uneasy about drug makers Merck & Co. and Schering-Plough Corp. Both pharmaceutical companies fell after a new study showed their cholesterol drug Vytorin did not meet its main goals.

The Dow Jones industrial average fell 29.23, or 0.25 percent, to 11,467.34 after moving in and out of positive territory.

Broader indexes showed more modest declines. The Standard & Poor's 500 index slipped 0.68, or 0.05 percent, to 1,260.00; and the Nasdaq composite index dropped 3.25, or 0.14 percent, to 2,279.53.

The moves follow a strong week for the markets. The Dow last week rose 3.57 percent, while the S&P rose 1.71 percent and the Nasdaq increased 1.95 percent.