Stocks edge lower as Fed outlook, Greece debt weighs

NEW YORK (Reuters) - U.S. stocks fell on Monday as markets continue to assess the implications of the Federal Reserves' move to increase emergency borrowing rates for banks and Greece's debt issues remain unresolved.

These factors overshadowed Schlumberger Ltd agreement to buy Smith International for $11.34 billion in stock and better-than-expected earnings from Lowe's Co .

"We are struggling to go up or down, I call this phenomenon the scared squirrel," said Dan Cook, senior market analyst at IG Markets in Chicago. "We are probably going to see a lot of back and fourth trader-type moves as opposed to investors."

The Dow Jones industrial average <.DJI> dropped 15.34 points, or 0.15 percent, to 10,387.01. The Standard & Poor's 500 Index <.SPX> lost 2.56 points, or 0.23 percent, to 1,106.61. The Nasdaq Composite Index <.IXIC> fell 4.75 points, or 0.21 percent, to 2,239.12.

The Fed raised its discount rate by a quarter percentage point to 0.75 percent late Thursday, the first change to its interest rates since December 2008. The moved led to speculation that the Fed may raise the benchmark rate sooner than thought.

Schlumberger's shares fell 6.2 percent to $59.95 while Smith International rose 6.1 percent to $40.00.

(Reporting by Edward Krudy; Editing by Theodore d'Afflisio)

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