The major indexes fluctuated throughout the session, with the Dow Jones industrials bobbing between positive and negative territory as investors tried to size up where the market was headed after last week's big decline. The Dow finished 63 points lower, having fallen in eight of the last nine sessions.

The market remained jittery about losses over soured subprime loans, or loans to customers with poor credit ratings. HSBC Holdings PLC, Europe's largest bank, said its 2006 earnings rose 5 percent but that it suffered $10.6 billion in losses on bad loans from its U.S. subprime mortgage operations.

Also pushing stocks down, a rising yen added to concerns about an erosion of the yen carry trade, which is the process of borrowing the low-yielding yen to acquire assets in other currencies with greater yields. A slowdown could hurt liquidity worldwide. By late in the day, the U.S. dollar was at 116 yen, trading near three-month lows after falling from above 120 yen less than a week ago.

Though the markets were uneasy today, they were hardly out of control as the Dow traded within a 150-point range and stayed above the 12,000 mark, which it had surpassed for the first time in October last year.

"Stability is a good sign," said Todd Salamone, senior vice president of research at Schaeffer's Investment Research in Cincinnati. He noted that stocks could see volatility for months, but that over the long term, the market looks poised to climb. "Expectations for economic data, earnings data — both have been ratcheted lower. Markets tend to do better when expectations are low, because they have better odds for positive surprises."

NUMBERS FOR THE DAY

The Dow fell 63.69, or 0.53 percent, to 12,050.41, having swung 75 points lower and 75 higher than Friday's close in earlier trading. The blue chips have now fallen 581 points, or 4.6 percent, from their closing price last Monday, the day before the market's plunge.

Broader stock indicators also fell. The Standard & Poor's 500 index slipped 13.05, or 0.94 percent, at 1,374.12, and the Nasdaq composite index — which is dominated by riskier technology and smallcap stocks — dropped 27.32, or 1.15 percent, to 2,340.68.

Bond prices fell, nudging the yield on the benchmark 10-year Treasury note to 4.51 percent from 4.50 percent late Friday, as the stock market's tolerable performance earlier in the day kept investors from rushing to Treasurys.

The dollar was higher against other major currencies except for the yen. Gold, though traditionally a safe-haven investment, continued its slide.

Oil prices dropped sharply on the possibility that stocks' decline could dampen demand, but they lifted from earlier lows below $60 a barrel to finish down $1.57 at $60.07 on the New York Mercantile Exchange.

Declining issues outnumbered advancers by about 5 to 1 on the New York Stock Exchange, where consolidated volume came to 3.44 billion shares, compared to 3.36 billion at the same point on Friday.

The Russell 2000 index of smaller companies dropped 15.38, or 1.98 percent, at 760.06.

The market saw the bulk of its drop right before the close, in a similar pattern to Friday, when the Dow flirted with gains only to drop 120 points late in the day. Going forward, market participants won't be ruling out the possibility of a large, late-day swing.

"Probably it's better to save any judgment on this market today until the last half hour," said Philip S. Dow, managing director of equity strategy at RBC Dain Rauscher in Minneapolis, before the markets closed Monday. He noted that little has changed in terms of economic fundamentals, but that the market is very volatile.

Stock investors appeared to have been somewhat consoled by comments attributed to U.S. Treasury Secretary Henry Paulson by Japan's finance minister, Koji Omi. Neither Omi nor Paulson, who began a three-nation Asian tour in Tokyo today, were concerned by the swings in regional stock markets, Omi told reporters in Tokyo. Both men contend the market mechanism was functioning well, Omi said.

Still, Asian and European stocks closed lower, keeping U.S. investors on edge. The Nikkei fell for the fifth straight session to close down 3.3 percent, Hong Kong's Hang Seng index fell 4 percent and the Shanghai Composite Index, which has been volatile in recent weeks, fell 1.6 percent.

In Europe, Britain's FTSE 100 dropped 0.94 percent, Germany's DAX index fell 1.04 percent, and France's CAC-40 declined 0.73 percent.

ECONOMIC REPORTS

The Institute for Supply Management's report on the services sector failed to inject much confidence in the market. The index registered at 54.3 for February, lower than analysts' forecast of 57.5 and January's reading of 59.0. Still, the reading above 50 indicates that U.S. service industries continue to grow, albeit at a modest pace.

Market participants are bracing for a rocky week, especially as investors await the Labor Department's jobs report Friday. So far, economic data have been coming in mixed, suggesting a moderating growth but not recession.

"We saw the ISM come in lower than expected, but the economy is slowing, and that's fine," said Scott Wren, senior equity strategist for A.G. Edwards & Sons. The ISM said the service sector, which represents about 80 percent of the nation's economic activity, saw nine of its industries grow and nine contract.

St. Louis Fed President William Poole, a voting member of the interest rate-setting Federal Open Market Committee, echoed recent statements by Fed Chairman Ben Bernanke today, saying the economic outlook is not as dismal as the market's recent downturn suggests, and that inflation remains a concern for policy makers.

But companies involved with subprime mortgages, already dragged down by concerns that too many people are defaulting, were kicked down further when New Century Financial Corp., the second-largest subprime lender, said late Friday that a federal prosecutor and the New York Stock Exchange are conducting investigations into its stock movements. New Century fell $10.09, or 69 percent, to $4.56.

Also spooking investors was Fremont General Corp.'s announcement today that it is planning to sell its subprime residential real-estate lending business. Fremont fell $2.82, or 32.4 percent, to $5.89.

The burgeoning subprime worries also hurt banks and homebuilders today: National City Corp. and Washington Mutual Inc. fell more than 3 percent, while Toll Brothers Inc., D.R. Horton Inc., and Centex Corp. all lost more than 4 percent.

Though the markets have been tumbling, market watchers note that merger and acquisition activity is still strong — a positive sign for stocks.

Pathmark Stores Inc. rose $1.21, or 10.8 percent, to $12.46 after A&P supermarket operator Great Atlantic & Pacific Tea Co. agreed to buy Pathmark for $1.3 billion in cash and stock. In an unusual move, investors bid Great Atlantic & Pacific higher; the stock was up $1.64, or 5.3 percent, at $32.50.

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