The market extended last week's losses as investors grew anxious for earnings reports to gauge the impact of hurricanes Katrina and Rita, and to get a glimpse of where the economy is headed as companies forecast future results. Stocks took a hit after Northrop said the storms would hurt its 2005 profit, while chip maker Xilinx pegged its sales below previous targets.

However, "this is the time when you get profit warnings instead of earnings surprises," said John Forelli, portfolio manager at Independence Investments LLC. "Once the reports start flying in next week, you typically get a lot of positive reinforcement from earnings."

But the market received some good news after the close, when aluminum producer Alcoa Inc. posted a profit that beat analysts' forecasts despite pressure from soaring energy costs and lower aluminum prices.

Wall Street had some early support from a $7.5 billion acquisition in the insurance sector and a upgrade at International Business Machines Corp., but the major indexes slipped into negative territory after each losing more than 2 percent last week.

Many traders took the Columbus Day holiday off. At the close of trading, the Dow Jones industrial average lost 53.55, or 0.52 percent, to 10,238.76, its lowest close since mid-May.

Broader stock indicators also fell. The Standard & Poor's 500 index dropped 8.57, or 0.72 percent, to 1,187.33, while the Nasdaq composite index sank 11.43, or 0.55 percent, to 2,078.92.

The U.S. government bond market was closed today for the Columbus Day holiday. The dollar was mixed against other major currencies in European trading, and gold prices edged higher.

Oil prices eased slightly as traders weighed expectations for greater demand this winter against a report last week showing September consumption declined 3 percent in the face of record energy prices. A barrel of light crude slid 4 cents to $61.80 on the New York Mercantile Exchange.

Wall Street analysts predict double-digit earnings growth for the third quarter, although estimates have been pared back amid inflation concerns and fears of an economic downturn. More importantly, investors will be focused on expectations for the coming months while interest rates continue to rise and soaring oil and gas prices threaten consumer spending.

Rick Pendergraft, a trader at Schaeffer's Investment Research, said he expects some companies will be conservative given the widespread uncertainty caused by the economic ripple left in the hurricanes' wake.

"Companies may be a little more cautious on their outlooks — not about the numbers they're going to put out, but about making a strong statement," Pendergraft said. Factors like the hurricanes and interest rates "are going to prevent people from stepping up and making bold estimates."

Meanwhile, investors are afraid that high materials and energy costs — crude oil vaulted to more than $70 a barrel following Katrina — will eat into the latest quarter's profit. But Alcoa, which previously warned of a profit shortfall, said its earnings grew 2.1 percent and beat estimates by 4 cents a share. Alcoa shares, which lost 38 cents to close at $22.66 in regular trading, rose 40 cents in after-hours activity.

Elsewhere, today's revised forecasts pulled down Northrop Grumman by 57 cents to $53.48, and Xilinx by $4.35 to $22.66.

Delphi, the largest U.S. auto supplier, on Saturday filed for bankruptcy after battling with soaring raw materials and labor costs. Delphi plunged 70.5 percent to 33 cents, and former parent General Motors Corp. lost $2.81 to $25.48.

Rival Dana Corp. said it will restate past earnings to fix improper accounting and withdrew its profit estimates for the rest of this year. Dana slid $3.15 to $6.04.

Insurer Lincoln National Corp. agreed to buy Jefferson-Pilot Corp. for $7.5 billion in a deal creating one of the nation's biggest life-insurance companies. Lincoln dropped $1.54 to $49.19, while Jefferson added $3.02 to $53.81.

IBM jumped 75 cents to $81.25, after Citigroup raised the computer maker to "buy" from "hold."

Declining issues outpaced advancers by 23 to 9 on the New York Stock Exchange, where preliminary consolidated volume of 2.21 billion shares topped the 2.12 billion shares traded Friday.

The Russell 2000 index of smaller companies was down 6.36, or 0.99 percent, at 637.97.

Overseas, Britain's FTSE 100 gained 0.23 percent, Germany's DAX index added 0.30 percent, and France's CAC-40 was higher by 0.16 percent. The stock market in Japan was closed for a holiday.