Investors showed little enthusiasm for the federal government's dramatic rescue of Fannie Mae (NYSE: FNM) and Freddie Mac (NYSE: FRE) on Monday, as they battered shares of banks on fears that they could be next to fail.

For tech investors, the day wasn't much fun either. Apple (NASDAQ: AAPL) added just a fraction on stronger than expected 3G iPhone sales, while the Nasdaq lost more than 1% on the day.

But that was nothing compared to the pain felt by investors in banks like Washington Mutual (NYSE: WM), which lost more than a third of its value on the day as the Philadelphia bank index fell to a 12-year low.

Yahoo (NASDAQ: YHOO) lost 4.2% after rejecting Microsoft's (NASDAQ: MSFT) latest offer.

Intel (NASDAQ: INTC) slipped 0.8% ahead of its results due out after the close on Tuesday. eBay (NASDAQ: EBAY) will report its quarterly results late Wednesday, and Microsoft (NASDAQ: MSFT), IBM (NYSE: IBM), Google (NASDAQ: GOOG) and AMD (NYSE: AMD) will make for a very busy night on Thursday.

But it will likely be earnings reports from the likes of Citigroup (NYSE: C), Merrill Lynch (NYSE: MER) and JP Morgan (NYSE: JPM) that will carry the most weight with investors this week. Traders will also have inflation data and testimony from Federal Reserve chairman Ben Bernanke to parse this week.

Level 3 (NASDAQ: LVLT), which won't report its results until July 24, jumped 15% on no apparent news.

The Nasdaq lost 26 to 2213, the S&P fell 11 to 1228, and the Dow shed 45 to 11,055. Volume declined to 5.44 billion shares on the NYSE, and 2.07 billion on the Nasdaq. Decliners led by a 25-9 margin on the NYSE, and 20-8 on the Nasdaq. Downside volume was 74% on the NYSE, and 78% on the Nasdaq. New highs-new lows were 33-658 on the NYSE, and 44-395 on the Nasdaq.

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