Stocks on edge as earnings approach

Investors cautious as projections call for a big slowdown following 15 hot quarters; Dow, S&P retreat from near-record highs.

By Steve Hargreaves, CNNMoney.com staff writer

NEW YORK (CNNMoney.com) -- Stocks struggled Monday, resting after a big runup last week and weary as traders eye the upcoming earnings reports, which begins after the closing bell.

The 30-stock Dow Jones industrial average (up 23.41 to 13,635.09, Charts) rose about 0.2 percent about 2-1/2 hours into the session. The broader S&P 500 (down 0.31 to 1,530.13, Charts) and the tech-heavy Nasdaq (up 1.07 to 2,667.58, Charts) were little changed.

INVESTOR RESEARCH CENTER INVESTOR RESEARCH CENTER upgrades & downgrades earnings & warnings public offerings INVESTOR RESEARCH CENTER INVESTOR RESEARCH CENTER

Earlier in the session the Dow was about 40 points away from its all-time trading high, while the S&P was about 20 points away.

Last week the Down rose an impressive 1.5 percent, while the S&P muscled its way to a 1.8 percent gain.

"Just common sense alone tells you that's too much," said Hugh Johnson, chairman of the asset management company Johnson Illington Advisors. "I don't care what the news is, we take a breather."

The news Monday was fairly light, and what everyone is really looking forward to are the corporate earnings reports, which begin to roll in today after the bell.

Johnson said investors are nervous as projections call for a big slowdown in earnings after 14 consecutive quarters of double digit growth.

"Until we see the earnings numbers, no one wants to make any commitments," he said. "It would be very foolish to do so."

Earnings at S&P 500 companies are expected to grow 4.4 percent this quarter, according to First Call.

That's down from 9.3 percent last quarter and double-digit growth in the prior 14 quarters, Johnson said. But earnings last quarter came in roughly twice as strong as estimates, so traders will wait to see if the good luck can continue.

Alcoa (up $0.23 to $41.89, Charts, Fortune 500) is the first major company to report. Analysts surveyed by earnings tracker First Call forecast that profit fell 10 percent from year-earlier levels.

In other corporate news Monday, Boeing (up $1.16 to $100.04, Charts, Fortune 500) got a boost from the unveiling of its 787 Dreamliner in a Sunday ceremony in Everett, Wash. New orders announced over the weekend bring the company's order total for the plane to more than $100 billion. Shares rose about 1 percent.

On the deal front, private equity firm The Carlyle Group announced a $2.7 billion deal to buy diversified manufacturer Sequa Group, agreeing to pay a premium of 54 percent to Friday's closing price. Sequa (Charts) shares rose by a similar amount.

Chemical giant Huntsman (up $0.15 to $28.15, Charts, Fortune 500) received a sweetened offer from buyout firm Apollo Management, according to a report in the Wall Street Journal. Huntsman shares rose about 1 percent.

Treasury prices rose, lowering the yield on the 10-year note to 5.15 percent, down from the 5.18 percent level reached late Friday. Bond prices and yields move in opposite directions.

The dollar was little changed verses the euro and yen.

Oil prices fell, with U.S. light crude down 59 cents to $72.22 a barrel on the New York Mercantile Exchange.

Overseas, European stocks rose in late day trade, and major Asian markets rallied.

Market breadth was negative. Losers edged out winners on the New York Stock Exchange as 513 million shares changed hands. On the Nasdaq, decliners beat advancers by a narrow margin on volume of 780 million shares.  Top of page

Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.

Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.