Profit-taking, Europe worries keep stocks in check

Updated: 8:24 p.m. ET

Last week, the stock market was about bullishness for the economy.

Today, the stock market was a contest amnog bulls and those  who remain skeptical that Europe can pull off a miracle in restructuring its financial system and those who simply want to cash in their profits.

The contest ended the day basically in a draw. The Dow Jones industrials ($INDU) and Nasdaq Composite Index ($COMPX) ended with tiny losses, but the Standard & Poor's 500 Index ($INX) and Nasdaq-100 Index ($NDX) enjoyed tiny gains. It was a bit of a seesaw battle. Stocks opened higher but dropped back after 10 a.m. ET. A rebound set in shortly after noon.

Research In Motion (RIMM) shares fell $1.44 to $15.56 after Jim Balsillie and Mike Lazaridis resigned as co-CEOs. A conference call with new CEO Thorsten Heins didn't go well. He talked about the need for better marketing; investors wanted to hear about innovation. And Netflix (NFLX) dropped $6.28 to $93.96 after Wedbush Securities said the company may offer a weak first-quarter forecast.

The Dow closed down 12 points to 12,709; the blue chips had been down as many as 55 points at 12:10 p.m. The S&P 500 gained 1 point at 1,316. The Nasdaq was off 3 points to 2,784; the Nasdaq-100, which tracks the largest Nasdaq stocks, was up very slightly to 2,437.

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After the close, Texas Instruments (TXN) reported earnings of 42 cents a share, 11 cents better than estimates. The number excludes 16 cents a share in costs related to its acquisition of National Semiconductor and 7 cents a share for closing two chip factories in Japan and Houston. It includes 6 cents for a tax benefit.

Shares were up $1.11 after hours to $34.30.

Separately, railroad giant CSX (CSX) shares were down 48 cents to $22.21 after fourth-quarter earnings of 43 cents a share were up 13% from a year ago but missed Street estimates by a penny. Revenue of $2.95 billion was up 5% from a year ago and in line with estimates.

On Tuesday, the Federal Reserve starts a two-day meeting that will end on Wednesday with its first explicit projection of interest rates, inflation and other indicators.

It's a heavy day of earnings. Reports are due from McDonald's (MCD), DuPont (DD), Harley-Davidson (HOG), Johnson & Johnson (JNJ), Travelers Companies (TRV), Verizon Communications (VZ) and Yahoo (YHOO). The big report is Apple (AAPL), which comes after the close.

But futures trading suggests U.S. stocks will open basically flat.

Hard to win investor affection
This was a day when a lot of investors said, "Show me."

Decent earnings from Halliburton (HAL) didn't impress investors; profit margins were trimmed by lower spending on natural gas drilling in North America. McDonald's was off 79 cents to $100.95 ahead of Tuesday's earnings report.

Europe was causing worries, even if stocks on the Continent moved higher. A deal with Greece still hasn't come together, and Spain, unhappy with fire-sale offers, halted plans to sell airports in Madrid and Barcelona.

The market has enjoyed a strong January. At the end of the day, the Dow was up 4%, with the S&P 500 up 4.6%, potentially their best January performances since 1997. The Nasdaq's S&P 500 was up 6.6%. If the gain holds for another week, it will be the best January 2001. (An earlier version version incorrectly said the gain would be the best since 1999.) 

Why oil moved higher
Crude oil (-CL) in New York settled up $1.25 to $99.58 a barrel -- its first gain in four days -- after the European Union agreed to ban crude imports from Iran starting July 1. That raised concern that retaliation from the Islamic Republic may disrupt the oil supply from the Middle East.

The EU also agreed to freeze assets of the Iranian central bank in Europe as well as of eight other entities and ban the trade in gold, precious metals, diamonds and petrochemical products from Iran.

Brent crude, the benchmark North Sea crude, was up 94 cents to $100.80 a barrel.

Retail gasoline was at $3.383 a gallon, according to AAA's Daily Fuel Gauge Report, down slightly from Sunday but up 3.5% this month and 8.7% from a year ago.

Gold (-GC) settled up $14.30 to $1,678.30 an ounce. Silver (-SI) was up 59.5 cents to $32.27 an ounce. Copper (-HG) had added 5.35 cents to $3.7985 a pound.

The U.S. dollar index fell below 80 for the first time since Jan. 3 as the euro rallied. The 10-year Treasury yield rose to 2.06% from Friday's 2.028%.

Energy shares were generally higher, led by Noble Energy (NE) and Chesapeake Energy (CHK).

But Chesapeake rose $1.32 to $22.28 because it's cutting. It said it will cut output, idle drilling rigs and reduce spending in gas fields by 70% after prices for natural gas hit a 10-year low of $2.231 per million British thermal units early today. Gas was at $2.48 per million BTU.

Other natural gas producers were higher on hopes that production shut-ins would boost natural gas prices.

Meanwhile, oil-and-gas producer Apache (APA) said Monday it agreed to buy Cordillera Energy Partners III, a privately owned oil and gas company, for $2.85 billion. Cordillera owns about 254,000 net oil and petroleum liquid field acres. Apache rose $1.58 to $98.38.

Separately, Pan American Silver (PAAS) fell $2.43 to $22.29 after it agreed to buy Canadian silver producer Minefinders (MFN) for about $1.5 billion. Pan American is offering $15.40 ($15.60 Canadian) in cash or cash and stock. Minefinders operates the Delores gold-and-silver mine in Mexico. Pan American has seven mines in Mexico, Peru, Argentina and Bolivia. Minefinders was up $2.60 to $13.95.

Energy prices -- New York close
			Mon.			Fri.			Month chg.			YTD chg.
Crude oil (-CL)			$99.58			$98.33			0.76%			0.76%
(per barrel)
Heating oil (-HO)			$3.0098			$2.9884			3.28%			3.28%
(per gallon)
Natural gas (-NG)			$2.5250			$2.3430			-15.52%			-15.52%
(per mil. BTU)
Unleaded gasoline (-RB)			$2.7856			$2.7903			4.82%			4.82%
(per gallon)
Brent crude			$110.58			$109.86			2.98%			2.98%
(per barrel)
Retail gasoline			$3.3830			$3.3850			3.49%			3.49%
(per gallon; AAA)

More talks on Greeceand worries about Europe
The eurozone's 17 finance ministers were meeting in Brussels today to discuss the terms of a second bailout package, worth about $130 billion euros, or $168 billion, for Greece from the European Union and the International Monetary Fund.

If a debt deal for the country falls through, Greece would default on roughly 14.5 billion euros of bonds maturing in March.

The country's private creditors, such as banks and investment firms, say they have reached a limit on the losses they are willing to take on their sovereign debt holdings.

They've been asked to swap their existing bond holdings for ones that are lower in value by 50% and with longer maturities. The move would slash Greece's debt by about 100 billion euros or $129 billion.

Their creditors' representative, the Institute of International Finance, reportedly remains optimistic that a deal preventing Greece from defaulting on its debt will be reached. But there was a Dow Jones report this afternoon that creditors would not agree to a bridge loan without a deal.

Separately, Germany's economy is set to "move sideways" over the coming months amid head winds from a slowing global economy and the eurozone's ongoing debt crisis, the country's central bank said today.

"Sideways movement is looming for the German economy at the start of 2012," while a contraction "can't be ruled out" for the fourth quarter of 2011, the Bundesbank said in its monthly report.

The wackiness of Sears shares

Sears Holdings (SHLD) were down $1.61 to $47.39 in another day of mind-boggling volatility. The shares opened up 11.8% to $54.76 and then fell apart. The shares were up 54% as last week ended -- 46% last week alone.

Many investors had been shorting the shares, believing that Chairman Edward Lampert couldn't engineer a turnaround. But new buying came into the stock last week. Some of the buying was speculation that Lampert was going to take the company private or at least buy back shares.

The buying forced short-sellers to cover. Short-sellers borrow shares to sell in hopes of profiting in buying them back and returning to their owners, usually their brokers.

The stock seems to have turned lower after numerous articles, including this piece on Seeking Alpha, pointed out that Sears is limited in how much it can spend on buybacks by the covenants in some of its borrowings. And those limits, apparently, are close to being met.

Utilities and energy shares lead the market

Utilities and energy shares were the market leaders today. Technology and financial stocks were close to breaking even.

Only 12 of the 30 Dow stocks were higher, led by Bank of America (BAC) and Hewlett-Packard (HPQ). In addition, 240 S&P 500 stocks and 41 Nasdaq-100 stocks were higher.

Southwestern Energy (SWN) was the S&P 500 leader, up $3.03 to $32.46. Netflix was the laggard.

Marvell Technology was the Nasdaq-100 leader, with Research In Motion the laggard.

Short hits from the markets -- New York close
			Mon.			Fri.			Month chg.			YTD chg.
Treasury yields
13-week Treasury bill			0.0400%			0.040%			300.00%			300.00%
5-year Treasury note			0.911%			0.891%			9.76%			9.76%
10-year Treasury note			2.067%			2.028%			10.48%			10.48%
30-year Treasury bond			3.146%			3.101%			8.90%			8.90%
Currencies
U.S. Dollar Index			79.934			80.406			-0.73%			-0.73%
British pound			1.5567			1.5552			0.19%			0.19%
(in U.S. $)
U.S. $ in pounds			£0.642			£0.643			-0.19%			-0.19%
Euro in dollars			$1.30			$1.29			0.52%			0.52%
(in U.S. $)
U.S. $ in euros			€ 0.768			€ 0.776			-0.52%			-0.52%
U.S. $ in yen			77.16			76.97			0.08%			0.08%
U.S. $ in Chinese			6.35			6.31			0.32%			0.32%
yuan
Canada dollar			$0.992			$1.015			1.15%			1.15%
(in U.S. $)
U.S. dollar			$1.008			$1.015			-1.14%			-1.14%
(in Canadian $)
Commodities
Gold (-GC)			$1,678.30			$1,664.00			7.12%			7.12%
(per troy ounce)
Copper (-HG)			$3.799			$3.745			10.55%			10.55%
(per pound)
Silver (-SI)			$32.2700			$31.6750			15.60%			15.60%
(per troy ounce)
Wheat (-ZW)			$6.1975			$6.1050			-5.06%			-5.06%
(per bushel)
Corn (-ZC)			$6.2000			$6.115			-4.10%			-4.10%
(per bushel)
Cotton			$0.9946			0.9863			8.49%			8.49%
(per pound)
Coffee			$2.2255			2.285			-3.09%			-3.09%
(per pound)
Crude oil (-CL)			$99.58			$98.33			0.76%			0.76%
(per barrel)