NEW YORK (AP) -- Wall Street pulled back for the first time in five days Monday as investors worried about balance sheets at banks and the quarterly results that businesses will start releasing this week.
Investors were also disappointed that talks for IBM Corp.'s $7 billion deal to buy Sun Microsystems Inc. have stalled -- a sign that the market is still not ready to support big mergers.
Financial shares sold off after a prominent analyst predicted more losses at banks and said the government's efforts to prop up the ailing industry might not be as effective as hoped.
Michael Mayo issued "sell" ratings on several banks and said in his report that loan losses could exceed levels seen in the Great Depression.
The market was already on edge about the coming parade of first-quarter results, which kicks off Tuesday with aluminum producer and Dow component Alcoa Inc. Worse-than-expected reports could easily upset the market's recent advance, which brought stocks up more than 20 percent from early March, when they hit their lowest levels in 12 years.
"You have some skittishness in the market," said Len Blum, managing director at Westwood Capital LLC. "We have earnings season up ahead and it's very difficult to predict what that is going to do."
The Dow Jones industrials fell 41.74, or 0.5 percent, to 7,975.85 after being down as much as 155 points.
The Standard & Poor's 500 index fell 7.02, or 0.8 percent, to 835.48, while the Nasdaq composite index fell 15.16, or 0.9 percent, to 1,606.71.
Technology stocks were lower following the IBM-Sun news. Discussions between the technology giants had been in their final stages, but The Associated Press learned that IBM took its offer off the table Sunday after Sun terminated IBM's status as its exclusive negotiating partner. more...
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