NEW YORK -- U.S. stocks were little changed Monday as investors weighed the likelihood of more Federal Reserve action after Friday's cut in the rate at which banks borrow from it.
Stocks surged on Friday after the U.S. central bank's emergency move to stabilize credit markets and keep the economy on track. World stock markets had fallen sharply in recent weeks as problems in the risky U.S. subprime mortgage sector spread to other markets.
Countrywide Financial Corp's shares rose 2.8 percent to $22.04 after the Wall Street Journal reported that the No. 1 U.S. mortgage lender had begun laying off employees at one of its lending units.
But more news trickling out of the beleaguered mortgage market continued to unnerve investors. Thornburg Mortgage's shares fell 9.6 percent to $13.60 after chief operating officer Larry Goldstone said there was a crisis in investor confidence in the mortgage sector.
"People will want to see what the Fed action actually means at the ground level," said Subodh Kumar, chief investment strategist at Subodh Kumar & Associates in Toronto.
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"The Fed has been hoping that this kind of action would make lenders more comfortable, and if it doesn't then they'll have to look at other measures."
The Dow Jones industrial average was up 7.64 points, or 0.06 percent, at 13,086.72. The Standard & Poor's 500 Index was down 2.36 points, or 0.16 percent, at 1,443.58. The Nasdaq Composite Index was down 0.19 points, or 0.01 percent, at 2,504.84.
Lowe's Cos shares rose 6.9 percent to $28.74 after the second-biggest U.S. home improvement retailer behind Home Depot Inc reported earnings that topped Wall Street's expectations.
The broader market may draw some support from lower oil prices, which fell after forecasts projected Hurricane Dean would steer away from the U.S. Gulf of Mexico that produces a third of the nation's oil and is home to half its refining capacity. U.S. crude was down $1.16 at $70.82 a barrel.
The Conference Board's report on July leading economic indicators, due at 10 a.m., is the highlight of the day's economic agenda. Economists in a Reuters survey forecast a median 0.4 percent rise after a 0.3 percent fall in June.
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