US stocks closed slightly lower on Monday as the dollar's rally and a drop in oil prices were not enough to stop investors from selling stocks and taking profits after last week's gains. Shares of toy maker Hasbro Inc slid after its profit missed Wall Street's target, while the stock of consumer products group Clorox Co finished higher after posting a better-than-expected profit that rose more than six-fold. The Dow Jones industrial average inched down just 0.37 of a point, or unchanged from a percentage standpoint, to close at 10,715.76.
The Standard & Poor's 500 Index was down 1.31 points, or 0.11 percent, to end at 1,201.72. The technology-laced Nasdaq Composite Index was down 4.63 points, or 0.22 percent, to finish at 2,082.03.
"After some dramatic moves higher last week, a pause is certainly expected," said Donna Van Vlack, director of trading at Brandywine Asset Management.
All three major indexes rose more than 1 percent on Friday, ending the week higher for the second consecutive week.
"There isn't a lot of major earnings news due this week, so you may have folks locking in some profits," Van Vlack said.
Trading was moderate, with 1.35 billion shares changing hands on the New York Stock Exchange, just under the 1.46 billion daily average for last year. About 1.71 billion shares were traded on Nasdaq, below the 1.81 billion daily average last year.
On the Big Board, advancing shares slightly outnumbered declining shares, while decliners narrowly outpaced advancers on the Nasdaq.
The dollar strengthened after US President George W. Bush handed a budget to Congress that forecast a narrowing in the budget deficit. The prediction of a narrower budget deficit added to optimism spawned by Federal Reserve Chairman Alan Greenspan's recent comments, suggesting a narrowing of the US current account deficit.
Shares of Pfizer Inc, the world's largest drug maker and a Dow component, rose 2.8 percent, or 68 cents, to $24.91 ahead of a US Food and Drug Administration meeting to review the risks and benefits of painkillers, including the company's Celebrex.
Defence stocks, including Lockheed Martin Corp and Northrop Grumman Corp, rose slightly. Military spending is set to keep growing in Bush's proposed budget but at a slower pace. Lockheed rose nearly 1 percent, or 49 cents, to $58.14 and Northrop gained 1.4 percent, or 75 cents, to $53.10.
In earnings-related stock moves, the shares of Hasbro, the No 2 US toy maker, fell 2 percent, or 40 cents, to $20.00 after the company reported quarterly earnings that missed analysts' expectations.
The stock of health insurer WellPoint Inc slipped 3.2 percent, or $4.04, to $120.85 after posting lower quarterly earnings as it grappled with soaring medical costs.
Shares of Clorox climbed almost 1 percent, or 58 cents, to $59.18 after the maker of household bleach and Glad trash bags said its quarterly profit increased more than six-fold. The company attributed profit gains to higher sales, cost savings and the transfer of some of its businesses to Henkel KGaA, a German soap and adhesives company.