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US stocks retreat after big Friday rally

US stocks retreated in early trading Monday after Friday's dramatic surge, which took the Dow Jones Industrial Average above 14,000 points.

Leading analysts had predicted the Dow would struggle in the immediate aftermath of Friday's rally, when the Dow closed at levels not seen since 2007.

About 40 minutes into trade, the Dow was down 94.66 points (0.68 percent) to 13,915.13.

The broad-based S&P 500 fell 8.01 (0.53 percent) to 1,505.16.

The tech-heavy Nasdaq Composite Index was down 12.70 (0.40 percent) to 3,166.40.

Schaeffer's Investment Research options strategist Tony Venosa predicted trading would see the"psychologically" important 14,000 level tested.

"Continue to watch this round number, as there could be an increase in volatility as the mainstream public becomes aware. Meanwhile, earnings season begins to wind down," Venosa said.

The action came after the Commerce Department reported new US industrial orders rose 1.8 percent in December from the prior month, below the 2.4 percent increase expected by analysts.

Health-care company Humana shares rose 2.6 percent after it reaffirmed that 2013 profits would be higher than the 2012 level.

Consumer-product manufacturer Clorox jumped 1.5 percent after reporting higher profits and an increase in its gross profit margin.

Oracle was off 0.8 percent after offering $2.1 billion in cash to buy Acme Packet, whose technology enables the communication of voice and data over networks. Acme was up 22.6 percent.

Embattled nutritional goods company Herbalife is down 9.1 percent following a report in the New York Post that the company is under investigation by the Federal Trade Commission.

Anheuser-Busch Inbev gave up 3 percent after Bank of America Merrill Lynch downgraded the stock following a move by the Justice Department to block a key merger that left its outlook "highly uncertain."

Bond prices rose. The yield on the 10-year US Treasury fell to 1.99 percent from 2.01 late Friday, while the 30-year declined to 3.19 percent from the 3.21 level Friday. Bond prices and yields move inversely.