U.S. stocks fell on Monday for the first time in three days, giving back some of Friday's gains, after a bigger-than-expected drop in New York state manufacturing and a decline in the dollar cast doubts about the state of the U.S. economy, while oil jumped $4 a barrel.
Investment bank Lehman Brothers Holdings Inc posted a quarterly loss that matched forecast earnings, causing shares to drop 6.4 percent in morning trading. Financials led the Dow in recent trading, with Citigroup and JPMorgan Chase up 2 and 3 percent respectively. On the downside, insurer AIG tumbled 0.3 percent to lead the Dow lower after it announced a shuffle in its top management.
As of 10:46 a.m. EDT, the Dow Jones Industrial Average slid 46.33 points, or 0.37 percent to 12262.16, the Standard & Poor's 500 index declined 2.49 points, or 0.18 percent, to 1357.54 and the Nasdaq Composite Index picked up 2.32 points, or 0.09 percent, to 2456.82.
Before the opening bell, the New York Federal Reserve's released a report stating that that manufacturing in New York state contracted in June for the fourth time in five months.
Crude oil also weighed in on the manufacturing sector, after touching a new high above $139 as a decline in the dollar spurred demand.
Lehman Brothers posted a second-quarter loss of $5.14 per share, more than four times worse than even the most pessimistic estimates by analyst. However, these results were right in line with preliminary results that Lehman posted a week ago. Shares were recently up $2.19 or 8.5 percent at $28.
General Electric plunged after the corporate conglomerate was downgraded to neutral from overweight by JPMorgan Chase. General Electric was down 40 cents or 1.4 percent at $28.75.
AIG announced its CEO Martin Sullivan, who will be replaced by Chairman Robert Willumstad, a former executive from Citigroup lifting shares up 18 cents or 0.5 percent to $34.36.
AT&T shares dropped 2.4 percent after UBS cut the telephone company to neutral from buy.