Most stocks fell Monday as a further rise in oil prices and continuing worries about the financial sector gave investors little reason to buy a day before a Federal Reserve meeting.
Disappointment that Saudi Arabia was not boosting production by more than 200,000 barrels a day sent oil prices higher, fanning concerns about inflation. Crude futures rose $1.38 to settle at $136.74 a barrel on the New York Mercantile Exchange.
With little in the way of economic data arriving, investors focused on the price of oil and the two-day meeting, which concludes Wednesday, of the Fed's interest rate committee.
Most investors expect the central bank to keep its key short-term interest rate on hold.
Denis Amato, chief investment officer at Ancora Advisors in Cleveland, questioned how the Fed would balance weakness in such areas as the financial sector with concerns about a weak dollar and inflation, which low interest rates can exacerbate.
"We think the Fed is sort of in a quandary here," he said. "If they raise rates, they run the risk of having some negative impact on the economy, and if they don't raise rates, they run the risk of negatively influencing the dollar."
The Dow Jones industrial average slipped 0.33 of a point to 11,842.36.
Broader stock indicators ended mixed after a day of back-and-forth trading. The Standard & Poor's 500 index edged up 0.07 of a point to 1,318, while the Nasdaq composite index fell 20.35 points, or 0.9%, to 2,385.74.
The Russell 2,000 index of smaller companies fell 5.92 points, or 0.8%, to 719.81.
Declining issues outnumbered advancers by about 2 to 1 on the New York Stock Exchange.
Treasury bonds were mixed. The benchmark 10-year Treasury note was trading at a yield of 4.17% late in the day, unchanged from late Friday. The dollar rose against most other major currencies, while gold prices fell.
The modest moves in stocks Monday followed a rough week that ended with a sharp pullback Friday on worries about the financial and automotive sectors and a resurgence in oil prices. The major indexes dropped by more than 1.5% on Friday, with the Dow falling more than 200 points to its lowest close since March.
The financial sector's woes continued to play out Monday. Financial stocks in the S&P 500 tumbled 2.7%, more than any other major industry group.
Shares of Citigroup and Goldman Sachs Group slid after the Financial Times reported that the companies were cutting staff. Citigroup fell 75 cents, or 3.9%, to $18.55, and Goldman fell $5.18, or 2.8%, to $178.59.
Other names in the sector declined as investors fretted about the overall well-being of the financials.
Bank of America fell $1.22, or 4.5%, to $25.88, a fresh five-year low. American International Group sank $1.80, or 5.6%, to $30.30.
Among Los Angeles-area banks, Downey Financial plunged 94 cents, or 23%, to $3.21, and East West Bancorp slumped 57 cents, or 7.1%, to $7.49.
Monday's rise in oil punished airlines and rewarded energy stocks.
United Airlines parent UAL fell $1.07, or 15%, to $6.09, while Delta Air Lines slid 68 cents, or 12%, to $5.
Among energy stocks, Exxon Mobil advanced $2.79, or 3.3%, to $87.70, while Halliburton rose $2.98, or 6%, to $53.01, touching a 52-week high of $53.11.
In other market highlights:
* U.S. Steel rose $8.23, or 4.5%, to $191.02 after a Goldman Sachs analyst wrote in a note to investors that the company was best poised among steelmakers to benefit from higher prices.
* Viacom fell $1.48, or 4.7%, to $30.02 after its latest film, Paramount's "The Love Guru," sold $13.9 million in tickets over the weekend, much less than expected. The stock is down 32% this year to its lowest level since the media company's 2006 split with CBS.
* Circuit City Stores dropped 91 cents, or 21%, to $3.37, its lowest level since 1991, after an analyst expressed doubt that Blockbuster would indeed pay the $6 a share it has tentatively offered for the electronics retailer.
* Overseas, key stock indexes rose 0.8% in Britain, 0.2% in Germany and 0.1% in France. Shares fell 0.6% in Japan.