Wall Street ended Monday's violent trading session mostly lower as a $4 decline in crude oil futures was mostly overshadowed by tumbling financial stocks, especially Freddie Mac and Fannie Mae. 

Today's Market

The Dow Jones Industrial Average fell 56.58 points, or 0.50% to 11231.96, the Standard & Poor’s 500 index lost 10.59 points, or 0.84%, to 1252.31 and the Nasdaq Composite Index dropped 2.06 points, or 0.09%, to 2243.32. The consumer-friendly FOX 50 lost 3.31 points, or 0.37% to 889.64.

The S&P 500 just barely avoided officially slipping into "bear market" territory on Monday, avoiding the technical status that the Dow and Nasdaq Composite have already entered. During the day the broad-based index did flirt with those levels, meaning it was down 20% from highs set in October 2007. 

Wall Street returned from the holiday weekend with a quick rally, including a 110-point jump on the Dow. However, the market eventually lost all of those gains, turning sharply negative Monday afternoon as financial stocks failed to join in the broader stock market rally. The Dow traded in a wide range on Monday, swinging more than 275 points. 

Alcoa (AA) helped lead the blue chips on Monday, gaining almost 2% ahead of its quarterly earnings report. On the other hand, Merck (MRK) fell just under 5% on an analyst downgrade to "neutral" from "buy." 

The Nasdaq Composite closed flat on Monday even as tech stocks posted modest gains. Yahoo! (YHOO) led the way on the Nasdaq 100, jumping 11% after billionaire investor Carl Icahn said Microsoft (MSFT) is still interested in acquiring the company. Also, United Airlines (UAUA) rose sharply on the decline in crude oil futures. 

“I think in the short term, the market is dramatically oversold...But I think the market will deal once again with the fundamentals, which obviously are not good, and that we are going to head back lower again," Peter Boockvar, equity strategist at Miller Tabak, told FOXBusiness before the afternoon selloff. “This will just be a temporary respite, which in the context of the market would be a bright spot.”

The rally was indeed temporary, as financials pulled back sharply Monday afternoon. 

Freddie Mac (FRE) plunged almost 20% to 14-year lows on capital raising worries. Analysts at Lehman warned that Freddie and Fannie Mae (FNM) may have to raise a combined $75 billion following an accounting rule change. However, Lehman said it is likely the government-sponsored enterprises would receive an exemption. 

Other financial names like UBS (UBS) and Lehman Brothers (LEH) suffered steep losses as well. “If you look at the financials, they are at it again," said Frank Davis, director of sales and trading at Lek Securities. 

The drama in the financial sector helped cancel out the good news from the energy market, namely a $4 pullback in crude oil. At one point oil futures were down $6, falling below $140 a barrel. Oil ended the day down $3.92 at $141.37 a barrel. 

Some geopolitical worries about a military strike in Iran may have subsided on reports that Iran was "willing to negotiate" with the U.S. and other international players on the issue of its uranium enrichment program. Also, crude tumbled earlier in the day on a stronger U.S. dollar. 

General Motors (GM) was in focus on Wall Street once again as The Wall Street Journal reported that the struggling auto maker is considering cutting thousands of white-collar jobs and could close or sell one or more of its brands, including Saturn. The considerations are being made as GM, like its U.S.-based colleagues Ford (F) and Chrysler, is facing plunging truck and SUV sales amid $4 gasoline prices. 

The Journal reported that GM is considering the cuts, which could come as early as next month, in an effort to meet its internal projections about returning to profitability by 2010. GM had no comment on the report but did tell FOXBusiness the Hummer brand is the only one currently being reviewed for sale. The stock rose sharply to start the day before closing with modest gains. 

Corporate Movers

Yahoo! (YHOO) soared after Carl Icahn said Microsoft (MSFT) CEO Steve Ballmer is still open to restart talks to buy all or some of the company if its current board is ousted. Icahn, who owns a significant amount of Yahoo!, said in a letter on Monday that he has been in contact with Ballmer over the past week. Yahoo! responded later on Monday, reiterating that it is ready to enter into talks and inviting Microsoft to issue an "immediate" proposal.  Shareholders are set to vote on Icahn's slate of directors in August. 

InBev signaled its intent to take its $46 billion bid to acquire Anheuser-Busch (BUD) hostile, filing preliminary papers with the SEC on Monday that would pave the way for A-B shareholders to oust the company's board of directors. Anheuser responded Monday afternoon, calling the InBev move a "self-serving effort" and "not in the best interest of shareholders." However, Anheuser said it is open to any deal that will provide "full and certain value" for shareholders. Two weeks ago Anheuser officially turned down the $65-a-share offer from InBev, which makes Stella Artois and Beck's. 

General Electric's (GE) NBC Universal and a pair of hedge funds agreed to purchase the Weather Channel and its related businesses for $3.5 billion from privately-held Landmark Communications. The move was widely expected after Time Warner (TWX) dropped out of the bidding earlier this year. In the deal, which was for much less than the original $5 billion price tag, NBC was joined by private equity firms The Blackstone Group (BX) and Bain Capital. Separately, the New York Post reported GE CEO Jeffrey Immelt has six months to turn things around at the corporate conglomerate or risk being fired. 

Merrill Lynch (MER) could sell its 20% stake in Bloomberg LP and its 49% holding in BlackRock (BLK), The Wall Street Journal reported in Monday's paper. The firm could look to raise $5 billion for its Bloomberg investment and $12 billion from Blackrock. The potential sales come as Merrill looks to firm up its balance sheet ahead of more expected writedowns when it reports earnings on July 17. Bloomberg, a privately held company primarily owned by New York City Mayor Michael Bloomberg, sells data software to Wall Street banks and investors. 

Merck (MRK) was the worst performing stock on the Dow after UBS reportedly downgraded the drug giant to "neutral" from "buy," citing worries about its Gardasil pill and the lack of a clear long-term outlook. UBS also lowered its price target to $40 from $43, according to Thomson Reuters. In addition to potentially lower-than-expected sales for Gardasil, the firm pointed to "setbacks" with Vytorin, Cordaptive and Singulair, according to Thomson Reuters. 

Royal Dutch Shell (RDS) CFO Peter Voser pulled his name out of the race to become the energy giant's next CEO and could be named the chairman of UBS (UBS), Dow Jones Newswires reported. Voser, who serves as a UBS board member and head of its audit committee, is seen as a front-runner for the chairman post, the news agency reported. With Voser out of the running, insiders Malcolm Brinded and Linda Cook are seen as two of the front-runners to replace current Shell CEO Jeroen van der Veer when he retires next summer, Dow Jones reported. 

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