US blue chips ended flat and technology stocks fell to fresh 2004 lows on Monday, as investors looked past some strong earnings reports and fretted over the possibility that corporate profit growth may slow in the months ahead. Beaten down in a month-long sell-off, the broad Standard & Poor's index posted its lowest close in seven months.
The technology-packed Nasdaq Composite Index notched its lowest close in nearly 10 months.
Drug-maker Pfizer Inc weighed on the market after Merck & Co Inc and Schering-Plough Corp won US approval on Friday to sell a 2-in-1 cholesterol pill called Vytorin, which competes with Pfizer's $10 billion-a-year Lipitor.
Quarterly scorecards from local telephone company BellSouth Corp and medical technology company Boston Scientific, showing an increase in profits, kicked off another heavy week of the earnings reporting season.
The solid earnings reports in the last few weeks, however, have been insufficient to overshadow fears that, in the quarters ahead, companies will have a tough time matching the strong earnings growth they had last year, analysts said.
In addition, security fears and uncertainty about potential policy shifts ahead of a number of coming events, including a Federal Reserve meeting in August and the Democratic and Republican conventions, were making investors reluctant to make big bets, said Jeffrey Kleintop, chief investment officer at PNC Advisors.
The technology-laced Nasdaq Composite Index fell 10.07 points, or 0.54 percent, to 1,839.02, its lowest close since October 2, 2003. The Dow Jones industrial average was down 0.30 of a points, or unchanged on a percentage basis, at 9,961.92. The Standard & Poor's 500 (S&P) Index fell 2.13 points, or 0.20 percent, to 1,084.07, its lowest close since December 17, 2003.
Trading was active, with about 1.4 billion shares changing hands on the New York Stock Exchange, and about 1.6 billion shares traded on Nasdaq.
Pfizer fell 56 cents, or nearly 2 percent, to $31.74.
Wal-Mart Stores Inc weighed on the market after the world's biggest retailer stood by its forecast for a 2 percent to 4 percent increase in July sales at its US stores open at least a year.
It fell 51 cents, or 1 percent, to $52.65.
Microsoft Corp, the world's largest software company, helped cap losses in the market after Barron's reported the stock is attractively valued as the company prepares for further revenue gains and faster-growing profits.
Microsoft rose 63 cents, or 2 percent, to $28.66.
Drug-maker King Pharmaceuticals Inc jumped on news it has a deal to be bought by Mylan Laboratories Inc for about $4 billion, adding patent-protected brand drugs to Mylan's generic-drug offerings.
King was up $2.52, or 24 percent, to $12.89. Mylan fell $3, or 16 percent, to $15.51.
BellSouth said second-quarter earnings rose on stronger sales of long-distance and high-speed Internet services. Its shares rose 91 cents, or more than 3 percent, to $26.81.