Stocks Finish Mixed

Major indexes traded in narrow ranges ahead of the Fed's interest-rate decision Wednesday. Oil prices moved higher

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Major U.S. stock market indexes closed narrowly mixed Monday, with the Dow industrials and S&P 500 virtually unchanged on the session. Higher oil prices lifted Exxon Mobil (XOM ) and other energy stocks while the broader market followed financials lower to extend recent losses. The sell-off in financials followed negative comments from Goldman Sachs and others about that group.

Meanwhile, investors also appeared to be unwilling to take on any major new positions in the market before the Federal Reserve's two-day policy meeting begins on Tuesday.

Bonds were mixed. The dollar index was higher. Gold futures were lower.

On Monday, the Dow Jones industrial average finished lower by 0.33 points at 11,842.36. The broader Standard & Poor's 500-stock index was up 0.07 points, or 0.01%, to 1,318.00. The tech-heavy Nasdaq composite index was down 20.35 points, or 0.85%, at 2,385.74.

Trading was slow on Monday, reports S&P MarketScope. On the New York Stock Exchange, 21 stocks declined in price for every 10 that traded higher. The ratio on the Nasdaq was 20 to 8 negative.

Among industry groups on the move Monday, the S&P Automobile index fell 7.5% as Lehman Brothers significantly widened its 2008 loss forecast for Ford Motor (F) as June industry-wide auto sales slow further.

The S&P Regional Banks index was down 3.0% after comments from Ladenburg Thalmann analyst Richard Bove, who cut his estimates and/or price targets on Regions Financial (RF), National City (NCC), and PNC Financial (PNC).

The S&P Other Diversified Financial Services index slumped 3.6% after Goldman Sachs adjusted its sector weighting for Financials to underweight.

The dollar gained strength on a weaker euro as the chances of the European Central Bank's raising interest rates this summer diminished on weaker economic data.

Corn Products International (CPO) shares surged after the company agreed to be acquired by Bunge Ltd. (BG) in a deal valued at $4.8 billion, including the assumption of about $414 million of Corn Products’ net debt. The terms of the deal call for CPO stockholders to receive Bunge shares with market value of $56.00 for each CPO share, subject to adjustment.

Monday was a quiet day for economic data, before the week revs up with yet the June Consumer Confidence Index on Tuesday and Durable Goods Orders and New Homes Sales, both for May, on Wednesday.

Much more is likely to be riding on each new shred of economic data from here on out now that the Federal Reserve seems to be more carefully weighing a balanced assessment of risks. That means that rather than being on hold, the next move on rates could be either up or down, depending on how the economic data fall. The markets will be listening carefully for the wording of the statement that comes out of the Fed policy committee's meeting on June 25. Expectations of a rate hike this week have been tempered, with many now looking for the Fed to maintain the 2.0% target on the federal funds rate.

The weekend oil summit between producers and consumers hosted by Saudi Arabia appears to be having the opposite of the intended effect on crude prices, which initially retreated at the prospect of more supply. The Saudis said they would boost production by 200,000 barrels to 9.7 million barrels a day in July, their highest output in 30 years according to the Financial Times. The Saudis also said that they will raise production further to reach 1.2 billion barrels a day in 2009.

But that means the largest oil exporter's spare production capacity, already at 25-year lows at 1.5 million barrels a day, would shrink still further. Concern that the additional barrels the Saudis plan to produce won't be enough to meet growing demand sent prices higher.

WTI crude oil futures for August delivery were trading up $2.35 a barrel at $137.71 in late trading Monday.

Among other stocks in the news on Monday, shares of Cummins Inc. (CMI) rose after UBS Financial analyst David Bleustein upgraded the stock to buy from sell largely on results from his proprietary Truck Survey and the company's improved market position due to Caterpillar's (CAT) plan to exit the on-highway engine business after 2010. Bleustein said he thinks Cummins' better market position should enable it to capture additional market share and extract price hikes.

Motorola (MOT) shares fell after Piper Jaffray lowered its rating to sell from neutral due to continued loss of handset market share in North America. With Motorola's recently announcing plans to separate its handset unit, Piper Jaffray sees potential for distractions and says a weaker product portfolio could result in accelerating share losses.

Major European indexes finished flat to higher Monday despite some weak economic figures. In London, the FTSE 100 index was up 0.83% at 5,667.20. In Paris, the CAC 40 index edged up 0.05% to 4,511.37, while Germany's DAX index gained 0.17% to end he session at 6,589.46.

In Asia, Japan's Nikkei 225 finished 0.61% lower at 13,857.47, while Hong Kong's Hang Seng index ended 0.13% off at 22,714.96.

Treasury market

Treasuries traded mixed ahead of the Fed policy committee decision on Wednesday. The 10-year note eased 03/32 to 97-19/32 for a yield of 3.17%. The 30-year bond rose 07/32 to 94-22/32 for a yield of 4.71%.