The Standard & Poor's 500 and Nasdaq Composite stock indexes fell on Monday amid concerns about rising interest rates and slower growth after the latest warning on inflation from a Federal Reserve official.
A rise in General Motors Corp kept the Dow industrials in positive territory after the company's former auto parts unit reached a deal with its union. But Qualcomm Inc shares fell nearly 3 percent, after the company filed a patent infringement complaint against mobile phone maker Nokia.
Investors were cautious about taking new positions before key inflation data due this week. "We've had every Fed speaker there's been for the past several weeks talk about inflation," said Frank Lesh, a futures analyst and broker at Future Path Trading in Chicago. "I think we're just drifting lower on a lack of interest today. We've got the inflation data over the next few days, so it doesn't seem that people are taking a chance either way."
The Dow Jones industrial average was up 8.88 points, or 0.08 percent, at 10,900.80. The Standard & Poor's 500 Index was down 2.93 points, or 0.23 percent, at 1,249.37. The Nasdaq Composite Index was down 16.06 points, or 0.75 percent, at 2,119.00.
Declining shares were beating advancers by 2 to 1 on the New York Stock Exchange.
Sandra Pianalto, president of the Federal Reserve Bank of Cleveland, said a sustained rise in core consumer prices would exceed her comfort level. The Labour Department will release its Producer Price Index for May on Tuesday, followed by the Consumer Price Index on Wednesday.
The Dow suffered its biggest loss of the year last week and global equities markets fell on worries that rate increases by central banks seeking to curtail inflation would slow growth. Fed Chairman Ben Bernanke will address banking students at 7:30 pm (2330 GMT) on Monday.
GM shares advanced 3.5 percent to $26.23. Bankrupt auto parts maker Delphi Corp announced a deal with the United Auto Workers union late on Friday that was seen as a step toward avoiding a strike which would cripple production at GM, Delphi's biggest customer. Qualcomm accused Nokia of violating six patents, sending its shares down $1.24 to $42.20.
"So much of Qualcomm's business is tied up in royalties that if the litigation starts casting uncertainty over the future, investors will start getting skittish," said Charter Equity research analyst Ed Snyder.
Monster Worldwide Inc, parent of job site Monster.com, fell after it joined other companies which have disclosed new inquiries into the granting of stock options to top executives. Goldman Sachs and Robert W. Baird analysts cut there investment ratings on the stock, which fell 6.8 percent to $39.14.
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