After trending lower throughout much of the morning, stocks regained some ground over the course of afternoon trading on Monday, although they remained mostly negative. The major averages all ended the day lower after closing higher in the four previous sessions.
The notable decline seen in morning trading came as traders cashed in some of the recent gains amid some disappointing corporate news and negative analyst comments.
Sun Microsystems (JAVA) helped to lead the technology sector lower after media reports said that acquisition talks between IBM (IBM) and Sun have collapsed, putting the deal at risk of failure.
The reports said that Sun's board rejected a formal acquisition offer by IBM on Saturday, sending a notice terminating Sun's deal to hold talks exclusively with IBM. In response, IBM reportedly withdrew its offer to acquire Sun on Sunday.
Additionally, bank stocks saw notable weakness in reaction to negative comments from veteran banking analyst Mike Mayo, who recently left Deutsche Bank AG to join Calyon Securities.
Mayo initiated coverage of several banks with either Sell or Underperform ratings, citing concerns about increased loan losses and the belief that government actions might not help as much as expected.
The major averages showed a notable upward move going into the close but still ended the day in the red. The Dow closed down 41.74 points or 0.5 percent at 7,975.85, the Nasdaq closed down 15.16 points or 0.9 percent at 1,606.71 and the S&P 500 closed down 7.02 points or 0.8 percent at 835.48.
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