After seeing some uncertainty for most of Monday's trading session, stocks ultimately closed well below the unchanged line. The lower close came as traders expressed concerns about the economic impact of the swine flu outbreak

While Hugh Johnson, chief investment officer for Johnson Illington Advisors told RTTNews that traders used the swine flu scare as an excuse to take some money off the table, he warned that a full blown epidemic could lead to a 10 to 15 percent correction.

Although the flu does seem to be spreading, many doctors agree that the swine flu is no more panic worthy than any other breakout of the human flu during flu season.

President Barack Obama said Monday that the spreading swine flu is something that should raise the country's state of alert but should not be seen as a cause for alarm.

On the corporate front, Verizon (VZ) reported first quarter net income of $0.58 per share, compared to $0.57 per share in the year-ago period.

Excluding special items, net income attributable to Verizon was $0.63 per share, compared to $0.61 per share in same quarter last year. On average, analysts expected the company to report earnings of $0.59 per share.

Meanwhile, Whirlpool Corp. (WHR) reported first quarter earnings of $0.91 per share, compared to $1.22 in the prior year quarter. The company reported net sales of $3.57 billion, down from $4.61 billion in the year-ago period.

In other news, auto giant General Motors (GM) said that it will cut 21,000 hourly jobs and reduce its U.S. dealer count by 42 percent by the end of 2010 under a revised viability plan. The company also plans to phase out its Pontiac brand and focus on its four core brands in the U.S.

The major averages all ended the day firmly in negative territory, although well off their lows for the session. The Dow closed down 51.29 points or 0.6 percent at 8,025.00, the Nasdaq closed down 14.88 points or 0.9 percent at 1,679.41 and the S&P 500 closed down 8.72 points or 1.0 percent at 857.51.

Sector News

Some of the worst performances came out of the real estate sector, driving the Morgan Stanley REIT Index down 6.9 percent by the sounding of the closing bell.

Within the sector, Colonial Properties Trust (CLP) showed a particularly steep decline, ending the session down 14.7 percent. With the loss, the stock pulled back well off of the nearly three-month closing high it set on Friday.

Airline stocks also saw significant weakness, as traders expect the flu scare to reduce global travel. The Amex Airline Index showed a substantial decline, falling 10.6 percent.

Banking, steel, and railroad stocks also posted notable losses. The Kbw Bank Index closed down 4.9 percent, while the Amex Steel Index and the Dow Jones Railroad Index ended the trading session with losses of 4.8 percent and 4 percent, respectively.

While oil service, software, and brokerage also ended the day considerable lower, healthcare provider, pharmaceutical, and health insurance stocks held onto strong gains.

Dow Components

By the end of the trading day, the majority of the Dow components were well below the unchanged line.

Chemical maker DuPont (DD) turned in one of the Dow's worst performances, falling 4.5 percent by the market close. With the loss, the stock pulled back well off the over five-month closing high it set on Friday.

American Express (AXP) and Alcoa (AA) also posted noteworthy losses on the day, with American Express closing down 4.2 percent and Alcoa suffering a loss of 3.8 percent.

Citigroup (C), Disney (DIS), and Microsoft (MSFT) also posted substantial losses by the market close.

Meanwhile, General Motors showed a strong upward move on news of the troubled auto-maker's new cost cutting measures, with the auto giant closing 20.7 percent on the day. Boeing (BA) and Pfizer (PFE) also posted notable gains on the day.

Other Markets

In overseas trading, stocks markets across the Asia-Pacific region closed mostly lower on Monday amid concerns about the impact of the swine flu outbreak. The Japanese market bucked the downtrend, however, with the Nikkei 255 Index edging up 0.2 percent.

Meanwhile, the major European markets ultimately closed mixed. While the French CAC 40 Index closed down slightly, the U.K.'s FTSE 100 Index and the German DAX Index posted gains of 0.3 percent and 0.4 percent, respectively.

In the bond market, treasuries closed near their best levels of the day, driving the yield on the benchmark 10-year note down 7.5 basis points to 2.921 percent.

Looking Ahead

Trading on Tuesday could be impacted by the release of the S&P/Case-Shiller Composite Housing Index at 9 a.m. ET. Additionally, the Conference Board's consumer confidence index is expected to be released at 10 a.m. ET.

On the earnings front, Pfizer headlines companies reporting before the bell. Office Depot (ODP), U.S. Steel (X) and Bristol-Myers Squibb (BMY) are also on the agenda.

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