Wall Street slipped lower Monday after the worst weekly decline of the year, as investors face the prospect of a lackluster corporate earnings season.
The Standard Poor’s 500-stock index was 0.2 percent lower, the Dow Jones industrial average fell 0.4 percent and the Nasdaq composite index was 0.1 percent lower in morning trading.
Earnings forecasts have been scaled back heading into first-quarter reports. Earnings from companies in the S.P. 500 are expected to have risen just 1.6 percent from a year ago, according to Thomson Reuters data, down from a 4.3 percent forecast in January.
A weaker-than-expected jobs report on Friday prompted concern that the American economy is in a slow patch.
Despite those headwinds, the loose monetary policy from central banks around the world continues to attract investors to equities, said Peter Cardillo, chief market economist at Rockwell Global Capital in New York.
“It’s all about easy money, and it’s lifting equities around the globe at this time,” Mr. Cardillo said.
The Bank of Japan started its bond purchases after it announced last week that it would inject about $1.4 trillion into the economy in less than two years.
In the United States, the Federal Reserve’s bond-buying program has been a significant catalyst of the recent rally that has sent major indexes to record levels.
Still, markets in the United States could see a technical correction of about 6 to 8 percent in the latter part of the month as the focus turns to corporate results, Mr. Cardillo said.
Alcoa’s earnings will be the first from a Dow component after Monday’s closing bell. JPMorgan Chase and Bed Bath Beyond are among the major companies set to announce results later in the week.
Ben S. Bernanke, chairman of the Federal Reserve, will give a speech after markets close on Monday. Investors have been watching for any insight into the Fed’s thinking on how long the central bank will keep its asset purchase program in place as it tries to bolster the economic recovery.
General Electric said it will buy oil field services provider Lufkin Industries for about $3.3 billion, sending Lufkin shares up 38 percent in early trading. G.E. slipped 0.2 percent.
Investors will be keeping an eye on the latest developments out of the euro zone after a constitutional court in Portugal overturned key austerity measures in the government’s latest budget. Portugal’s prime minister said the government would cut spending to meet targets agreed with its lenders. European stock markets were ahead modestly in afternoon trading.
Article source: http://www.nytimes.com/2013/04/09/business/daily-stock-market-activity.html?partner=rss&emc=rss
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