Major market indices closed mixed with strength in the dollar bringing weakness to commodity stocks. The Dow ($INDU) lost 41.34 points to a level of 9,778.86. The S&P 500 ($SPX) declined 3.64 points to 1,064.66. The Nasdaq ($COMPQ) tacked on 5.18 points to 2,138.04. Volume was moderate on the session with the NYSE trading 1.20 billion shares and the Naz turning over 2.44 billion shares. Market breadth was negative on the session by a 10-to-20 and 13-to-15 margin on the Big Board and Naz respectively.

Commodity related stocks suffered losses to start the week due to strength in the dollar. Caterpillar (CAT) shares have been rallying, but gave back 1.9 percent today. Oil related shares declined following a 3.2 percent drop in crude prices to $69.71 a barrel. Commodity traders are worried that oil prices might have moved farther than the economic recovery would suggest they should have. The rising dollar also put pressure on oil prices. Shares of the Oil Services HOLDRs (OIH) fell 1.17 percent to a price of $117.81.

Tech stocks outperformed the broader market Monday, but Dell (DELL) did not join the party. The computer maker was the big news story of the day though after announcing it would buy Perot Systems (PER) for $30 a share in cash. The deal is valued at $3.9 billion and lifted PER shares 65.05 percent to $29.56 on the session. However, Dell shares fell 4.07 percent to a price of $16.01.

Lennar (LEN) was another stock in the news Monday with the home-builder announcing earnings for its fiscal third quarter. The company saw its losses grow larger during the quarter, but LEN noted that new orders are on the rise. Nonetheless, the stock fell 3.14 percent to a price of $16.02. However, LEN shares are trading well above their 52-week low of $3.42 hit on Nov. 21, 2008.

Financial stocks were mixed on the session, though AIG (AIG) saw strong gains. The insurer saw its stock rise 21.27 percent to $48.40 on news a key congressional committee member was considering possible loan revisions to extend the term of AIGs loan and to lower the rate. AIG shares have shown volatility not seen since the dot.com euphoria in the late 1990s and early 2000. The 30-60 day ATM implied volatility for AIG averages more than 130 percent.

Though the bears did get some traction Monday, selling is light at best. Monday saw mostly positive news, so weak session is being blamed on profit taking. Tuesday's session is likely to be quiet as well ahead of the FOMC statement on Wednesday. The bulls are looking for Dow 10,000 while the bears feel stocks are overbought and significant profit taking is in store.

Jody Osborne
Senior Writer & Options Strategist
Optionetics.com ~ Your Options Education Site