The Dow was flat as bargain hunters bought some defensive large-cap stocks, while the S&P 500 and the Nasdaq fell on Monday as the latest round of the global equity sell-off gave investors a reason to avoid risk. Declining stocks outnumbered advancing stocks by more than 3 to 1 on both the New York Stock Exchange and the Nasdaq.
The blue chip Dow average was little changed as investors snapped up stocks in the consumer staples and health-care sectors, often seen as safer bets in times of turmoil. Coca-Cola Co was the top positive influence on the Dow, up 1.6 percent at $46.60. Shares of drug company Merck were right behind it, rising 0.8 percent to $44.56. Meanwhile, the small-cap Russell 2000 index, meanwhile, was down 1.4 percent.
"This correction has been building for at least the last nine months ... and we're not getting the all clear sign," said Michael Vogelzang, president of Boston Advisors Inc. "Nothing here would surprise me for the rest of the day. I just don't think anyone knows where the emotion and reaction is going to take us."
The Dow Jones industrial average was unchanged from Friday's close at 12,114.10. The Standard & Poor's 500 Index was down 4.21 points, or 0.30 percent, at 1,382.93. The Nasdaq Composite Index was down 12.90 points, or 0.54 percent, at 2,355.10.
Trading was volatile with the major US stock indexes flipping between positive and negative territory throughout the day. The CBOE Volatility index, or VIX, was up 1.5 percent. US stocks performed relatively better than equities markets overseas. Tokyo's Nikkei average fell 3.34 percent, marking its biggest one-day tumble in nine months, while the FTSEurofirst 300 ended down 1.2 percent.
But investors were still reeling from last week's sell-off, which cost S&P 500 investors about $572 billion, according to Standard & Poor's. New Century Financial corp. led a broad decline among subprime mortgage lenders as the crisis in the sector escalated. New Century shares plunged 66 percent to $5.03 and topped the Big Board's list of percentage decliners amid regulatory examinations into the company's accounting errors and stock trading.
Shares of Fremont General Corp, the second-largest independent subprime lender, slid 26.2 percent to $6.42 on the NYSE. In economic news, the Institute for Supply Management's monthly service sector index, was below expectations and down from the previous month, but it showed further growth in services, the largest segment of the US economy.