Sam Collins

Be Ready to Pounce on a Pullback

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Monday turned out to be a day of rest for the stock market. With most quarterly earnings from minor players and nothing in the way of economic reports, the day turned out to be a real snoozer.

Before the opening, McDonald's (MCD) reported a monthly increase in global sales, but that had little impact on the market.

The strongest group was a defensive one -- health care. But the gains there weren't widespread, and the group was up just 0.8% as a whole. Merck (MRK) rose 1.7% on an opinion increase to "conviction buy" from Goldman Sachs. But Eli Lilly (LLY) fell 3.04% when Goldman cut their opinion to a "conviction sell."

Trading volume was light in advance of the Federal Reserve meeting today and tomorrow. The Fed governors aren't expected to make any changes to their target range for the federal funds rate, but the Street usually gets just a bit nervous when the Fed meets, especially when stock are overvalued following a major move up.

At the close, the Dow Jones Industrial Average (DJI) was off 32 points to 9,338, the S&P 500 (SPX) fell 3 points to 1,007, and the Nasdaq (NASD) was down 37 points to 1,992.

The NYSE traded 1.1 billion shares, and the Nasdaq crossed 553 million shares. Decliners were just slightly ahead of advancers on both exchanges.

Crude oil for September delivery fell 33 cents to $70.60 a barrel, and the Energy Select Sector SPDR (XLE) gained 22 cents at $51.05.