Investors balk at extending rally

Stocks mostly fell today as investors balked at extending the market's recent rally despite an improved outlook from Intel Corp.

Trading was quiet, as it had been all week, as summer holidays kept many traders out of the market. With fewer participants, the market has lost some of its recent momentum that sent the major indexes up about 5% in less than two weeks.

The market got an initial boost after the world's largest maker of computer chips raised the top end of its sales forecast for the current quarter from $8.9bn (€6.2bn) to $9.2bn (€6.4bn).

But the Intel news was not enough to keep stocks on the up.

The market's mood has turned cautious this week, dampening the euphoria around Federal Reserve chairman Ben Bernanke's upbeat assessment of the economy that helped send stocks up about 2% last week.

Investors are worried that after sending stocks up more than 4% since early March, the market's rally may have run its course.

"Our view is it won't be straight up," said David Darst, chief investment strategist at Morgan Stanley Smith Barney. "The power of this rise has been double the power of the last 10 bull markets on average."

Trading is expected to remain erratic through at least the next week as summer on Wall Street winds to a close.

According to preliminary calculations, the Dow fell 36.43, or 0.4%, to 9,544.20. The Standard & Poor's 500 index fell 2.05, or 0.2%, to 1,028.93, while the Nasdaq composite index added 1.04, or 0.1%, to 2,028.77.