Stocks Flat as Investors Await Fed

Stocks were flat Monday as investors awaited Federal Reserve Chairman Alan Greenspan’s testimony before Congress later this week. Major indexes closed narrowly lower after seesawing through the session, but more stocks gained than declined.

A planned merger between Netscreen Technologies and Juniper Networks gave technology stocks some support. But uncertainty over Greenspan’s remarks, expected Wednesday and Thursday, could combine with the upcoming holiday weekend to keep institutional investors from taking large positions this week, said Michael Murphy, head trader at Wachovia Securities in Baltimore.

“I think there will be directionless trading with a lot of volatility until he talks, so that shoots almost the whole week,” Murphy said. “Until then, it’s more of the same.”

The Dow Jones industrials fell 14 points, or 0.1%, to 10,579.03, failing to add to Friday’s 97-point rally. The tech-heavy Nasdaq composite index lost 3.44 points, or 0.2%, to 2,060.57, while the Standard & Poor’s 500 index slipped 2.95 points, or 0.3%, to 1,139.81.

Advancing issues beat decliners by about 5 to 4 in quiet trading on the New York Stock Exchange. U.S. financial markets will be closed Monday for the Presidents Day holiday.

Technical problems delayed the opening of trading at the American Stock Exchange, but were fixed by early afternoon. The problem was caused by a glitch in the computer and networking system that the Amex jointly owns with the NYSE, Amex spokeswoman Mary Chung said.

No trading problems were reported at the NYSE.

There was little news to spark investor interest. With the bulk of earnings season over, only three companies in the S&P; 500 -- Hasbro, Teco Energy and Federated Investors -- reported earnings before the market opened Monday. And the only government economic news was a report that wholesale inventories rose 0.6% in December, their biggest rise in a year.

Wall Street also had little momentum behind it, given the erratic, and mostly lower, trading of the last few weeks.

“We started off the year on a pretty strong note and things got a little heated up and maybe a little too enthusiastic,” said Steven Goldman, chief market strategist at Weeden & Co. in Greenwich, Conn. “There’s some consolidating, but most stocks are pushing higher today. There are strong underpinnings to the market.”

Netscreen, which makes Internet security hardware, shot up $9.54, or 36%, to $35.94, after agreeing to be acquired by Sunnyvale, Calif.-based Juniper in a $4-billion stock swap. Juniper was off $3.29, or 11%, at $26.18.

In other trading, oil prices closed higher ahead of today’s OPEC meeting in Algeria. Traders expect the Organization of the Petroleum Exporting Countries, which controls almost half the world’s oil exports, to leave its output ceiling unchanged at 24.5 million barrels a day and to call on members to rein in any production above official limits.

Crude oil for March delivery closed 35 cents higher at $32.83 a barrel in New York trading.

The yield on the benchmark 10-year Treasury note dipped to 4.05% from Friday’s close of 4.08% on speculation Japan would continue to accumulate U.S. debt after Japanese Finance Minister Sadakazu Tanigaki indicated the Asian country will continue buying dollars to stem the yen’s rise. The pledge boosted the dollar against the yen, and comes as the U.S. prepares to sell $56 billion of Treasury notes this week.

In other highlights:

* Drug stocks fell as investors shifted out of one of this year’s best-performing industries. Pfizer lost 76 cents to $38.09 to contribute the most to the drop in the S&P; 500. Merck fell 59 cents to $48.17, and Medtronic, the world’s largest maker of devices that regulate heartbeats, lost $1.01 to $46.99.

* A ban on U.S. chicken by big overseas buyers due to a case of bird flu in Delaware sent shares of major U.S. poultry companies lower Monday in the latest shock to the livestock industry over food safety. Tyson Foods closed down 33 cents at $16.70, Pilgrim’s Pride fell $1.13 to $19.43, and Sanderson Farms slipped $1.52 to $52.62.

* Expectations that OPEC won’t increase production helped energy stocks post the biggest increase among the S&P; 500’s 10 industry groups. Exxon Mobil added 22 cents to $40.73, and Unocal advanced $1.52 to $36.84.