Stocks End Flat After Regional Bank Worries

Stocks finished flat as morning gains ebbed during an afternoon selloff.

The Dow Jones Industrial Average added 3 to close at 9509. The Nasdaq dropped 3 to end at 2018 and the S&P 500 lost 1 to close at 1026. The absence of major economic data and the trailing off of earnings season kept trading light and subdued Monday afternoon. 

A Monday afternoon commentary by New York University economist Nouriel Roubini warned that too speedy an exit from the global current stimulus programs would weaken the ercovery and leave open the possibility of a "double dip into a second and deeper recession." REPORT

Investors had more time to parse Fed Chairman Ben Bernanke's speech Friday, in which he said recovery would be slow in coming, despite signs that the global economy was stabilizing. The S&P 500 closed Friday at a 10-month high after the 1.9% advance. Shares were buoyed by news from the National Association of Realtors that July sales of existing homes climbed 7.2%, the fourth consecutive monthly increase.

The S&P Case-Shiller Housing Price Index comes out Tuesday morning, and will be followed by new home sales figures Wednesday and jobless claims data on Thursday, all of which will offer deeper perspective on the depth of domestic economic recovery.

Government spending also is in the limelight, with the "cash for clunkers" program due to expire tonight and as some called at the Jackson Hole conference for spending to be reined in.

Comments from prominent banking analyst Richard Bove at Rochdale Securities that as many as 200 regional banks could fail prompted a selloff in the financial sector.

Among stocks to watch, Nokia (NOK) shares saw a mild uptick after the world's leading mobile-phone maker said it was going to sell a netbook using an Intel microprocessor.

Shares of Sears Holdings (SHLD) fell after Barron's said the retailer's stock could lose 50% if problems aren't corrected.

International markets were stronger. Asian stock markets ended higher, with the Nikkei rising 3.4% after U.S. gains Friday. Auto makers rose on a weaker yen and mining shares gained across the region. In Europe, mining stocks also led the gains amid renewed confidence over a global economic recovery.

Crude-oil futures paused near 10-month highs Monday as market participants mulled the prospects for further gains after last week's rally. As of 4:08 p.m., the front-month October light, sweet, crude contract on the New York Mercantile Exchange was trading 27 cents below its afternoon close at higher at $74.10 a barrel.