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Stocks Finish Mostly Lower

Stocks Monday afternoon finished mostly lower, with the S&P 500 squeezing out a miniscule gain, amid light trading volume in the week before the Labor Day holiday.

On Monday, the Dow Jones industrial average slid 31.23 points, or 0.33%, at 9,317.64. The broader Standard & Poor's 500 index added 0.65 point, or 0.07%, to 993.71. The tech-heavy Nasdaq composite index slipped 1.01 point, or 0.06%, at 1,764.31.

Trading was sparse before the Labor Day weekend even as several Dow members made headlines. On back-to-school strength, Wal-Mart (WMT) raised its August sales growth forecast to a range of 4% to 6%, above an earlier forecast for a 3% to 5% gain.

Fresh economic data should give investors some direction Tuesday, but volume will likely continue to be thin.

Durable goods orders for July are due Tuesday. MMS International, an economic research outfit, expects a jump of 1.5%, while shipments increase 1.0%. The solid gains would continue on the trend of better news from the manufacturing sector and would support the view that factory activity has accelerated.

Consumer confidence should climb to 78.0 in August from July's level of 76.6, says MMS. Trends in the labor market suggest a "jobless recovery" is underway. An uptick in confidence is widely expected, so an increase in line with expectations will likely be taken in stride, says MMS.

Several companies are due to report earnings Tuesday: Toll Brothers (TOL), H&R Block (HRB), Dollar Tree Stores (DLTR), and Myriad Genetics (MYGN).

In technology news Monday, after a company forecast for stronger-than-expected earnings and revenues last week, the head of chipmaker Intel (INTC) said Monday he does not yet see an industry-wide recovery.

Boeing (BA) said it will complete construction of ten partly built satellites for mobile communication company ICO Global Telecommunications. The work is expected to generate hundreds of millions of dollars in revenues for Boeing.

General Electric (GE) reportedly sent French media giant Vivendi a letter on Saturday detailing a merger proposal that may help the company's cash needs. GE is hoping to merge the assets of the two companies.

Alcoa (AA) is under pressure after analysts at Prudential cut the firm's rating on the aluminum producer to "hold" from "buy."

Caterpillar (CAT) stock stumbled after Legg Mason cut its rating to "hold" from "buy" on valuation.

Among other stocks in the news, Lucent Technologies (LU) said that the U.S. Department of Justice and the Securities and Exchange Commission have begun investigations into its operations in Saudi Arabia.

On the economic front, existing home sales for July rose higher than expected, to a 6.12 million pace. MMS International, an economic research group, had expected the figure to hold steady at a 5.85 million-unit annual pace. Inventories of homes dropped to 4.7 months, from 5.1 while the median home resale price rose 4.1%.

Treasury Market

After opening in the green following a thinly traded overseas session, Treasuries sank like a stone amid more mighty housing data and lingering anxiety in the credit markets, says MMS. There were some market jitters after ratings agency Fitch downgraded Freddie Mac's (FRE) subordinated debt and preferred stock ratings, though S&P and Moody's upheld their ratings on Freddie.

World Markets

European bourses finished mostly lower. Trading was closed in London for a bank holiday. On Friday, the Financial Times-Stock Exchange 100 index had added 2.40 points, or 0.06%, at 4,225.90.

In Paris, the CAC 40 lost 37.63 points, or 1.13% at 3,291.36. Germany's DAX index was down 48.96 points, or 1.38% at 3,500.09, despite press speculation that business confidence might have improved.

Asian markets finished mixed. Japan's Nikkei 225 index lost 4.53 points, or 0.04%, to finish at 10,276.64, amid profit taking and disappointing July retail sales data. In Hong Kong, the Hang Seng index added 3.49 points, or 0.03%, to close at 10,764.22.

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