WALL STREET RALLY LOSES STEAM.(BUSINESS)

Byline: LISA SINGHANIA Associated Press

NEW YORK -- Stocks closed moderately lower Monday after technology stocks were unable to sustain an early rally instigated by bargain hunters.

The failed recovery was the latest reminder that Wall Street remains nervous about third-quarter profits despite a drop in oil prices Monday and efforts by the U.S. and other financial powers to strengthen the euro, the European currency.

The technology-led Nasdaq composite index fell 62.54 to 3,741.22, wiping out an early gain of nearly 65 points.

The Dow Jones industrial average fell 39.22 to 10,808.15 after giving back an early 50-point gain, while the Standard & Poor's 500-stock index was off 9.69 at 1,439.03 and the Russell 2000 index of smaller companies slipped 3.44 to 515.38.

``This just highlights that this market has a bit more time to tread water with issues of third-quarter earnings and the lower, more tempered outlook for the economy going forward,'' said Richard Cripps, chief market strategist for Legg Mason. ``Stocks are adjusting, reflecting, discounting or whatever you want to call it to this deceleration of economic growth.''

The stock market has generally retreated this month as the end of the third quarter approaches. Many companies have warned that profits will be below expectations because of higher energy costs and the weak euro. Many reports are also pointing to a moderation in the economy, and investors aren't sure what that will mean for stocks.

Intel fell $2.56 to $45.38, extending the 22 percent decline that took place Friday after the company warned of lower profits.

IBM closed down $2.25 at $121.75, after trading higher early in the day. Cisco Systems fell $3.13 to $57.19, and Microsoft slipped $2 to $61.25.

On the Big Board, Micron Technology was down $4.50 at $47. Lucent fell $1.25 to $30.75.

But financial shares moved higher, with Citigroup up $1.50 at $54.25 and American Express up $1.13 at $59.88.

Among the day's big movers, Ciena rose $6.81 to $127.56 after the maker of optical network equipment announced a major order from Korea Telecom. Sprint PCS rose $3.50 to $31.50 after Lehman Brothers upgraded its rating of the mobile phone company.