Wall St ends flat, investors pause after 4-day rally

       Investors slowed their hectic buying of stocks Monday, leaving the major indexes little changed after a four-day advance.
       Stocks pulled back from their early highs as financial stocks, which had been surging, retreated.Meanwhile, Treasury prices rallied ahead of the latest round of debt auctions.
       Analysts had expected a pause after stocks soared last week, lifting the Dow Jones industrials 370 points.The advance picked up momentum Friday after Federal Reserve Chairman Ben Bernanke declared that the economy is on the verge of recovery.
       I think people still believe there are signs of recovery here, but it doesnt hurt to take a little bit of profits, said Alan Villalon, senior research analyst at First American Funds.
       Market experts have been warning, though, that the markets upbeat mood could be tested with reports this week on consumer confidence and housing. Some signs of recovery have emerged already in the housing market, but consumers are still struggling. Improved consumer confidence and spending is widely seen as one of the keys that could help end the recession.
       Were lining up here in advance of the data this week, said James Cox, managing partner at Harris Financial Group. This is a good time to get out.
       Bank shares gave up some of their early gains and traded mixed, weighed down by losses among regional banks. Investors have been worried that smaller banks could face significant hardships in the coming months as losses among commercial real estate loans pile up.
       In a research note late Sunday, Rochedale Securities banking analyst Richard Bove predicted that 150 to 200 more U.S. banks could fail in the current banking crisis on top of the 81 banks that have already failed this year, putting greater stress on the Federal Deposit Insurance Corps deposit insurance fund.
       The Dow rose 3.32, or less than 0.1%, to 9,509.28,after earlier rising as much as 82 points. The Standard & Poors 500 index fell 0.56, or 0.1%, to 1,025.57, while the Nasdaq composite index fell 2.92, or 0.1%, to 2,017.98.
       Advancing issues were slightly ahead of losers on the New York Stock Exchange, where volume came to 1.23 billion shares.
       In other trading, the Russell 2000 index of smaller companies slipped 1.27, or 0.2%, to 580.24.
       Bond prices rose as investors prepared for $197 billion in auctions this week. The yield on the benchmark 10-year Treasury note fell to 3.48% from 3.57%late Friday, while the yield on the three-month T-bill fell to 0.15% from 0.16%.
       The markets have been choppy lately as investors react to mixed economic data, but so far there hasnt been a big pullback as many have expected. The Standard & Poors 500 index is up 52% since early March.
       We still think there is a lot of fear out there, said Ryan Detrick, chief technical strategist at Schaeffers Investment Research. The economy has to validate what the stock market has done.
       Justin Golden, strategist at Macro Risk Advisors in New York, said some of the markets recent gains have been magnified by short-covering, in which investors have to buy stock after having earlier sold borrowed shares in a bet they would fall.
       A lot of bear investors have thrown in the towel, he said. That shouldnt be confused with people being ultra bullish about the market.
       There were no major economic reports Monday, but investors are anxious ahead of the Conference Boards monthly consumer confidence index on Tuesday, and the Reuters/University of Michigan report on consumer sentiment on Fr iday. The Standard & Poors/Case-Shiller index on home prices for June will be released yesterday, while the Commerce Department will report on new home sale for July today.
       LONDON 4,896.23 +45.34
       European shares hit their highest closing level in more than 10 months on Monday, boosted by banks and miners, with recent economic data and positive comments from some central banks prompting investors to grab risky assets.
       Britains top share index hit its highest closing level in 10-1/2 months, mirroring rallying global equities as reassuring comments from key central bankers helped drive optimism over the pace of global recovery.
       The FTSE 100 closed at 4,896.23 points, up 45.34 or 0.93%.
       In Frankfurt, the DAX index ended at 5,519.75 points,up 57.01 or 1.04%. In Paris, the CAC-40 index closed at 3,652.17 points, up 36.36 or 1.01%.
       The FTSEurofirst 300 index of top European shares ended 0.9% up at 975.19 points, the highest closing level since early October. The index is up 17% this year and has surged 51% from a record low in March.
       Banks were among top gainers, with the DJ STOXX banking index, which has jumped 52% this year, rising 1.8% on Monday. St andard Chartered, Barclays, Lloyds, Royal Bank of Scotland and Societe Generale rose 1.5-6.8%.
       Economic data is in favour of a stronger recovery than expected. We can be quite bullish on risky assets,said Romain Boscher, head of equity management at Groupama Asset Management.
       Inflows will be in favour of equities and outflows will come from money markets. This should last at least for several more weeks, especially with a lot of investors coming back from holidays and jumping on the bandwagon, he added.
       Sentiment improved after data showed Euro zone industrial new orders rebounded more than expected in June. The figures followed a survey on Friday showing sales of previously owned US homes jumped 7.2%in July to mark the fastest pace in nearly two years.
       Comments from US Federal Reserve chairman Ben Bernanke also added to optimism. He said on Friday that the prospects for a return to growth in the near-term appeared good, although the recovery was likely to be relatively slow..
       Miners got strength from higher metals prices, which jumped on bets that the economic crisis was coming to an end. BHP Billiton, Anglo American, Antofagasta,Rio Tinto, Xstrata and ENRC rose 3.3-5.3%.
       While the occasional dissenting voice is still heard amidst the bullish discourse surrounding this latest rally, more and more naysayers appear to be jumping on the recovery bandwagon, said Tim Hughes, head of sales trading at IG Index.
       With the optimism Monday extending from Asia,through Europe and in early trading at least on to Wall Street, further gains seem pretty likely in the medium-term.
       Investors have been shifting money into equities,generally seen as risky assets compared to bonds, for better returns and analysts said the trend was expected to remain in the near term.
       The combination of positive growth impulse, expected recover y of the 12M forward earnings estimates and moderate valuation suggests that the uptrend on the equity market will continue, UniCredit strategists said in a note.
       Credit default swap indexes sharply fell, indicating a rise in risk appetite in Europe. The Markit iTraxx Crossover index, made up of 44 mostly junk-related credits, fell 21.5 basis points to 581.5.
       The VDAX-NEW volatility index was at 27.57, down from 33.08 a week ago when it rose 14%. The lower the index, which is based on sell- and buy-options on Frankfurts top-30 stocks, the higher the appetite for risky assets.
       Energy shares were in demand as crude oil prices rose 0.9% on expectations that an economic recovery will spur a rebound in energy demand. BP, Royal Dutch Shell,BG Group, Tullow Oil, Repsol, Total and StatoilHydro added 0.1-2.1%.