Wall Street ended the day flat to slightly lower as financial stocks stumbled again and crude oil prices failed to cool off even after the weekend oil summit. 

Today's Market

The Dow Jones Industrial Average fell 0.33 points, or less than 0.01% to 11842.36, the Standard & Poor’s 500 index gained 0.07 points, or 0.01%, to 1318.00 and the Nasdaq Composite Index lost 20.35 points, or 0.85%, to 2385.74. The consumer-friendly FOX 50 fell 0.53 points, or 0.06% to 917.36.

After drifting between slight gains and losses throughout the day, the Dow ended flat and the Nasdaq Composite posted modest losses. Wall Street was unable to rebound from Friday's ugliness, when the Dow lost more than 200 points and closed below the psychologically-important 12,000 threshold for the first time in three months.

ExxonMobil (XOM) and Chevron (CVX) led the blue chips on Monday, rising more than 2.5% each on the resilient crude oil prices. Those gains were basically erased by big losses from General Motors (GM) and AIG (AIG), which fell more than 5.5% each. GM fell to its lowest level in 33 years while AIG took a dive after Barron's recommended selling the stock. 

The Nasdaq Composite performed worse than the broader market on Monday, with United Airlines (UAUA) plunging 15% and tech stocks like Ericsson (ERIC) slumping.

Wall Street continues to closely watch the price of crude oil, which remains just a few dollars from all-time records. Crude rose on Monday even though Saudi Arabia pledged to boost oil productivity by 200,000 barrels per day to 9.7 million barrels for the rest of the year. That announcement came from a weekend oil summit in the Saudi city of Jeddah. 

Crude oil futures rose $1.38 on Monday to close at $136.74 a barrel. The energy market didn't appear to be too impressed with the production hike as traders had been expecting a larger output increase from the Saudis. Also, Saudi oil is not the highly desired light, sweet crude kind. Oil traders instead focused on more production worries out of Nigeria, which is now pumping oil at a 25-year low.

Oil prices have been a major worry for Wall Street as they have cut into corporate profits and helped slow consumer spending, which accounts for more than two-thirds of the U.S. economy. Airlines and other transportation companies have taken the brunt of the damage from oil prices, which have more than doubled from a year ago. 

Financial stocks posted the largest losses on Monday after a pair of firms issued bearish reports on the sector.

Bank of America cut its profit estimates on a series of brokerages and asset managers, including Merrill Lynch (MER), UBS (UBS), Lazard (LAZ), Jeffries (JEF) and KBW (KBW).

Also, Goldman Sachs downgraded U.S. financial and consumer stocks to "underweight," reversing an upgrade it made seven weeks ago. That move helps explain why Citigroup (C) and Home Depot (HD) were two of the biggest losers on the Dow on Monday. 

Now Wall Street will likely turn much of its attention to the Federal Open Market Committee's meeting on Wednesday. The central bank is expected to keep interest rates steady as the chances for a deep recession have apparently subsided but inflation has begun to pose a problem. The market expects the Federal Reserve to raise rates later this year in an effort to fight inflation. The downside to that strategy is that it could make an economic recovery more difficult.

Corporate Movers

Bunge (BG) plans to buy Corn Products International (CPO) in a $4.4 billion deal that would marry two of the country's oldest agricultural businesses. The $56-a-share deal values Corn Products at a 31% premium from its closing price on Friday. The companies expect the transaction to close in the fourth quarter, subject to approval from regulators and shareholders. 

Republic Services (RSG) announced a deal to buy Allied Waste Industries (AW) for more than $6 billion in a transaction that would create the nation's largest garbage disposal company. Republic Services's offer places a 4% premium on Allied's closing price on Friday.  

United Airlines (UAUA) posted double-digit percentage losses and confirmed plans to lay off 15% of its pilots. The job cuts, which will impact 950 of its pilots, come as the airline cuts its domestic capacity by 14%. 

AIG (AIG) fell sharply, nearly hitting an 11-year low on Monday on a negative mention in Barron’s from over the weekend. Saying the stock will “likely be dead money for some time to come,” the publication recommended selling the insurance giant. Just a few months ago in February Barron’s had recommended buying AIG.

Citigroup (C) is about halfway done with plans to lay off 6,5000 workers in its investment banking unit, sources told the Associated Press. Much of the rest of the reduction will be happening this week, as early as Monday, The Wall Street Journal reported Monday citing people close to the firm. Citi has been badly hurt by the subprime debacle and the credit crunch and has announced plans to cut a total of 13,200 jobs to reduce its costs. 

Goldman Sachs (GS) is expected to slash 10% of its investment banking division even though it has avoided much of the turmoil in the financial sector, the Financial Times reported. The new job cuts began last week and will impact its M&A sector, the newspaper reported. 

BCE (BCE) rose sharply after the Canadian Supreme Court removed obstacles for a $35 billion buyout of the telecom. Previously, a lower court had blocked the sale to the Ontario Teachers' Pension Plan on the rationale that it didn't consider the interest of bondholders. If the deal goes through as expected, it will be the largest leveraged buyout ever. BCE is the parent of Bell Canada. 

Circuit City (CC) plunged on Monday after the electronics retailer was cut by Raymond James to “underperform” from “market perform,” according to Reuters, citing theflyonthewall.com. The company reported worse-than-expected quarterly results last week and has set its shareholder meeting for Tuesday.

Walgreen (WAG) posted a 2% increase in its fiscal third-quarter profit but missed Wall Street estimates by a penny. The drugstore operator earned 58 cents per share on $15.02 billion in sales, an increase of 9.6% from a year ago. 

Data Dump

The day's lone economic report, the Chicago Fed Activity Index, showed improvement in May but still signaled trouble for the economy. The index rose to -0.96 last month from -1.23 in April. However, the three-month average was still pointing toward a recession. 

World Markets

The Dow Jones Euro Stoxx 50 Index, a gauge of the 50 biggest companies in Europe, gained 0.75 points, or 0.02%, to 3427.33. The FTSE 100, London's benchmark index, rose 46.40 points, or 0.83%, to 5667.20.

On the continent, Paris's CAC 40 Index picked up 2.10 points, or 0.05%, to 4511.37 while Germany's DAX gained 11.02 points, or 0.17%, to 6589.46.

In Asia, Japan's benchmark Nikkei 225 Index fell 84.61 points, or 0.61%, to 13857.47. Hong Kong's Hang Seng Index declined 30.64 points, 0.13%, 22714.96.