Market loses steam as traders seek safety

NEW YORK - Stock traders retreated Monday from a rally that had brought indexes to their highest levels since the peak of the financial crisis in September 2008.

Gold crossed $1,400 an ounce to another record on Monday as traders looked for safe places to park money.

The Dow Jones industrial average fell 37.24, or 0.3 percent, to close at 11,406.84. It surged 2.9 percent last week after the Federal Reserved announced a $600 billion stimulus package for the U.S. economy.

The Standard & Poor's 500 index fell 2.60, or 0.2 percent, to 1,223.25.

The Nasdaq composite index continued to outperform other market measures, as it has done all year, edging up 1.07, or 0.04 percent, to 2,580.05. The technology-focused index is up 13.7 percent for the year, compared with a 9.4 percent gain for the Dow and a 9.7 gain for the S&P 500.

Financial companies were down the most among the 10 industry groups in the S&P 500 index. Technology, energy and materials companies were the only groups in the index to show meager gains.

The dollar rose 0.5 percent against a broad basket of currencies. That hurts big U.S. companies such as Caterpillar Inc. that do a lot of business overseas, because a stronger dollar makes their products more expensive in other countries. Caterpillar was off 0.5 percent, and Boeing Co., another big exporter, was off 1.5 percent, tying with Travelers Cos. as biggest laggard among the 30 companies in the Dow.

Despite weakness in other financial stocks, shares of Bank of America Corp. rose 1.9 percent to make it the best performing Dow company. But Radian Group Inc. fell 11.4 percent on concerns that the Philadelphia mortgage insurer's offering of convertible debt would dilute shareholders. And shares of Ambac Financial Group Inc., which said after regular trading closed Monday that it had filed for Chapter 11 bankruptcy protection, were down more than 60 percent in after-hours trading.

The euro fell 0.8 percent from recent highs, in part on renewed concerns about the debt burdens of the weaker economies among countries that use the euro. U.S. markets had swooned this spring over concerns that a fiscal crisis in Greece would spread to Portugal, Spain and other weak economies in the euro zone.

Traders will get a better indication of consumer spending this week when several major retailers announce earnings. Kohl's Corp., Macy's Inc. and J.C. Penny Co. Inc. will release third-quarter reports starting Wednesday. Retailers such as The Gap Inc. and Macy's rose more than 8 percent last week on October sales that suggested that consumers would increase their holiday spending.

Leaders from the Group of 20 industrialized and developing nations will meet Thursday and Friday in Seoul. Tensions have risen in the group over trade imbalances and the respective strength of the Chinese yuan and the dollar.

Officials from several countries have criticized the Fed's bond-buying program amid concerns that it will spark asset bubbles in emerging economies.