Wall Street turned lower Monday as investors, still anxious over Friday's dismal employment report, digested speeches by Federal Reserve officials about the central bank's interest rate plans.
The market advanced in early trading, but the gains weren't broad and were quickly lost. Many banks, retailers and homebuilders fell due to ongoing nervousness about the housing market's drag on the economy.
The Dow dropped 71.53, or 0.55 percent, to 13,041.85.
Broader stock indexes also fell. The Standard & Poor's 500 index lost 12.60, or 0.87 percent, falling to 1,440.95, and the Nasdaq composite index declined 23.01, or 0.90 percent, to 2,542.69.
Bond prices rose as stocks slipped, pushing the yield on the benchmark 10-year Treasury note down to 4.34 percent from 4.37 percent late Friday.
With little economic data due Monday, Wall Street focused on speeches by San Francisco Fed President Janet Yellen, Dallas Fed President Richard Fisher, Atlanta Fed President Dennis Lockhart, and Fed Governor Frederic Mishkin. Investors are keen to learn their perspectives on the health of the economy and look for any hints as to what the central bank might do when it meets Sept. 18.
For many traders, a rate cut after more than a year of the Fed standing pat on rates is inevitable. The debate, as they see it, is whether the Fed will reduce rates by a quarter percentage point or a half percentage point.
Wall Street is worried that the Fed might not cut rates by as much as they want. Yellen said market turmoil has increased risk to economy, but that rate policy should not bail out investors, while Lockhart said investors should consider Friday's unemployment report alongside a mostly strong batch of retail sales reports seen recently. Over the weekend, Philadelphia Fed Chief Charles Plosser said in reference to Friday's payroll number that the Fed's Open Market Committee doesn't make rate decisions based on any one number.
The dollar slipped against most other major currencies, while gold prices, which have risen sharply in recent weeks amid concerns about the strength of the U.S. dollar, rose to fresh multiyear highs. A rate cut by the Fed could hurt dollar-denominated assets, prompting some investors to shift into gold.
The stock market's decline began Friday after the Labor Department reported the first monthly decline in payrolls in four years -- further depressing a market already uneasy about a lackluster housing market, tightening availability of credit and a rise in mortgage defaults.
While some investors had hoped for weak data to help the Federal Reserve justify cutting interest rates when it meets next week, the market was shocked by a loss in jobs when a gain had been expected. The drop in payrolls stirred concerns of a recession. With consumer spending accounting for about two-thirds of economic activity, Wall Street is concerned about any loss in employment that would make consumers hesitant to spend.
Because of Friday's retrenchment, the three major indexes all lost more than 1 percent for the week.
And on Monday, the market also absorbed more news of fallout from mortgage failures. Countrywide Financial Corp. said after the closing bell Friday it would cut as many as 12,000 jobs -- up to 20 percent of it work force -- as the mortgage lender tries to ride out upheaval in the mortgage industry. The company expects new mortgages to fall 25 percent next year.
Countrywide (CFC) fell 71 cents, or 4 percent, to $17.50.
Some technology stocks were strong, though.
Intel Corp. (INTC) rose 23 cents to $25.70 after raising its sales outlook, and Advanced Micro Devices Inc. (AMD) rose 15 cents to $12.75 after releasing its newest microprocessor. Also, Apple Inc. (AAPL) rose more than 2 percent after selling its 1 millionth iPhone on Sunday.
Light, sweet crude fell 86 cents to $75.84 per barrel on the New York Mercantile Exchange.
The Russell 2000 index of smaller companies was down 0.63, or 0.08 percent, at 775.16.
Overseas, Japan's Nikkei stock average fell 2.22 percent. In afternoon trading, Britain's FTSE 100 was up 0.15 percent, Germany's DAX index was down 0.12 percent, and France's CAC-40 was up 0.08 percent.