Stocks ended lower on Monday as worries about a new record low in the dollar offset optimism about lower oil prices and upbeat sales reports from retailers.
The Dow Jones industrial average was off 50.99 points, or 0.47%, to 10,776.13. The broader Standard & Poor's 500 index fell 5.21 points, or 0.43%, to 1,204.92. The Nasdaq composite index fell 6.40 points, or 0.30%, to 2,154.22.
Looking ahead to Tuesday, investors will get a reading on consumer confidence for the month of December. The gauge is expected to tick up to 96 from 90.5 in the previous month.
There are no major earnings releases due out on Tuesday.
On Monday, the dollar reached new lows against the euro, with the European curency testing the $1.36 level. A weaker dollar can decrease the attractiveness of U.S. assets for foreign investors.
Crude oil prices were sharply lower Monday, with Nymex crude oil closing off nearly $3 to $41.26 as funds dumped positions amid forecasts of more normal temperatures ahead.
Shares of oil major including Exxon Mobil (XOM) and ChevronTexaco (CVX) fell in sympathy.
Homebuilding and furnishing sectors were also heading lower as interest rates climbed.
Meantime, retailers were mostly bullish about holiday sales. Wal-Mart (WMT), the world's biggest retailer, sees December same-store sales in the U.S. rising in the middle of its 1% to 3% percent range for December.
Online retailer Amazon.com (AMZN) called 2004 its best-ever holiday.
And luxury accessories company Coach (COH) increased its quarterly sales guidance thanks to strong holiday sales.
But gadgets retailer Sharper Image (SHRP) reduced its fourth quarter and fiscal year forecast.
In other stocks news, aerospace and defense outfit Boeing (BA) said China Eastern Air plans to buy six 737-700 jets for about $240 million.
Shares of some insurers eased Monday after tidal waves killed more than 20,000 in parts of Asia, raising fears of hefty insurance claims.
Smith Barney said profits of hotel operator Four Seasons (FS) could be hurt by the earthquake related disaster in Asia.
Treasury prices ended slightly lower as bonds were pressured by lower oil prices, a weaker dollar, and better sales reports.
European stocks closed lower. The London stock market was closed in observance of the Boxing Day holiday.
Germany's DAX index was off 16.26 points, or 0.11%, at 4,235.36 even though the Bild newspaper reported Germany's December joblessness rose by 173,000 to 4.43 million, the highest December level since 1997. Munich Re, Allianz, and Hannover Re were a bit lower but they all said it's too early to give an estimate for damages caused by the earthquake off the Indonesian island of Sumatra.
In Paris, The CAC 40 fell 5.07 points, or 0.13%, at 3,817.69. Accor and Club Mediterranee were lower after the earthquake off Sumatra, Indonesia, resulting in tsunami waves raised concerns that travel plans will be canceled. Air France-KLM was also lower.
Asian markets closed lower. Japan's Nikkei index slipped 3.13 points, or 0.03%, to 11,362.35.
In Hong Kong, the benchmark Hang Seng Index ended off 40.40 points, or 0.28%, to close at 14,194.90.