Soft Economy Weighs on Investors

N E W  Y O R K, May 7 -- Stocks fell modestly as investors cashed in recent gains against the background ofongoing uncertainly about the direction of the U.S. economy.

Throughout the session, major stock indexes hovered nearunchanged, lacking any significant economic data. Trading was largely was confined to individual issues.

The Dow Jones industrial average fell 16.07 points,or 0.15 percent to end at 10,935.17, according to the latestdata, while the Nasdaq composite index lost 18.15points, or 0.83 percent, at 2,173.38. The benchmark Standard &Poor's 500 index slipped 3.13 points, or 0.25 percent, to1,263.48.

Some traders opted to lock in profits during Monday'ssession, after the recent run, amid a dearth of new economicdata and especially as the uncertainty lingers over the healthof the world's largest economy.

But helping sentiment are mounting hopes of more aggressiveFed monetary easing. U.S. bond dealers are almost unanimous inforecasts the central bank will slash short-term rates byanother half percentage point to 4 percent at its meeting onMay 15, according to a Reuters poll.

The mounting rate hopes lifted the market on Friday,despite news that the economy lost jobs in April at the fastestrate in a decade.

"The market is bland today. It will take sometime fordirection so I think it will be quiet for the rest of the day,"said Tom Sparico, stock trader at Bengal Partners in Stamford,Conn. "But after the (surprisingly weak) employment report (onFriday) … the market is feeling it will see further Fedeasing, probably 50 basis points," he said. "And that suggestslonger term that the equity market will be in better shape."

Corporate News

Dow stock component JP Morgan Chase & Co. lost 73cents $49.87 after Prudential lowered its rating on thefinancial powerhouse, saying the slower economy should causeproblem loans to continue to increase. Financial AmericanExpress Co. also continued to drag on the Dow.

Lucent Technologies Inc. , the most active issue onthe New York Stock Exchange, lost 60 cents at $10.55. The telecom gear maker ousted its chief financial officer.