Wall Street has closed slightly lower, with gains in materials and banks countered by declines in consumer staples shares, as investors girded for the start of an earnings season expected to be gloomy.
Equities gave up gains late on Monday with the three major indexes finishing in negative territory after posting losses last week.
Investors are next looking for cues from the first-quarter earnings season, beginning in earnest with Alcoa’s report after the bell on Monday.
Ahead of the results, Alcoa shares rose 3.9 per cent.
Profits at S&P 500 companies are expected to have fallen 7.7 per cent in the first quarter, according to Thomson Reuters I/B/E/S.
“This is just all jitters and anticipation of the beginning of earnings season,” said Jonathan Corpina, senior managing partner with Meridian Equity Partners in New York.
“The expectations aren’t that high for earnings this quarter, so I think investors are starting to feel a little uneasy about that.”
A rocky start of the year was followed by a sharp rebound since mid-February and stocks are now little changed for the year so far.
Financial shares, the worst performing group this year, were among the leaders on Monday. JPMorgan, Citigroup and Bank of America all gained ahead of their quarterly reports this week.
“I don’t really read too much into the action today because I just think people are waiting to see what the earnings outlook is, particularly with the banks,” said Walter Todd, chief investment officer at Greenwood Capital Associates in Greenwood, South Carolina.
The Dow Jones industrial average fell 20.55 points, or 0.12 per cent, to 17,556.41, the S&P 500 lost 5.61 points, or 0.27 per cent, to 2,041.99 and the Nasdaq Composite dropped 17.29 points, or 0.36 per cent, to 4,833.40.
Of the 10 S&P sectors, only financials and materials closed higher.
Norfolk Southern shares fell 2.7 per cent to $US79.28 ($A105.63) after Canadian Pacific said it was giving up on its $US28 billion bid to buy the railway.
National Oilwell Varco dropped 6.1 per cent to $US27.32 after the oilfield equipment maker said it would cut its quarterly dividend.
About 6.5 billion shares changed hands on US exchanges, below the 7 billion daily average for the past 20 trading days, according to Thomson Reuters data.
Advancing issues outnumbered declining ones on the NYSE by 1,801 to 1,224, for a 1.47-to-1 ratio on the upside; on the Nasdaq, 1,437 issues fell and 1,388 advanced for a 1.04-to-1 ratio favouring decliners.
The S&P 500 posted 21 new 52-week highs and 3 new lows; the Nasdaq recorded 38 new highs and 28 new lows.
