Stocks slip on earnings jitters
Wall Street retreats in early going as investors gear up for start of corporate reporting period.
NEW YORK (CNNMoney.com) -- Stocks slipped Monday morning as investors showed caution ahead of the start of the quarterly corporate reporting period, which begins later Monday with Alcoa.
The Dow Jones industrial average (INDU) lost 0.4% in the early going. The Standard & Poor's 500 (SPX) index lost 0.6% and the Nasdaq composite (COMP) fell 0.4%.
Peter Cardillo, chief market economist for Avalon Partners, said markets have already "baked in" weak earnings from companies such as Alcoa on Monday and chipmaker Intel (INTC, Fortune 500) on Thursday, but they could still keep stocks from advancing, he said.
"The negative news coming out of earnings will keep us in a defensive trading range most of the week," said Cardillo.
Tim Crimmins, senior equity trader at Lord Abbett, said there shouldn't be too many surprises from results out this week.
"Expectations are low, and I think we will deliver on those expectations," said Crimmins.
Earnings: Investors are bracing for corporate results, which traditionally kick off with Alcoa (AA, Fortune 500). The Dow component, which warned last week it will cut about 13% of its global workforce, is due to post results after the market close.
Alcoa shares fell 6% ahead of the report.
Also this week, results are expected from American Airlines' AMR (AMR, Fortune 500). on Wednesday, Merrill Lynch (MER, Fortune 500) and the biotech Genentech (DNA) on Thursday, and the electronic giant Sony (SNE) on Friday.
Economy: A weak jobs report rattled investors last week and is likely to continue to weigh on sentiment. The government said Friday that U.S. employers cut 524,000 jobs from their payrolls in December.
The dismal report sent stocks lower Friday, with the blue-chip Dow and S&P 500 both losing about 2%. The Nasdaq fell nearly 3%.
Companies: Stocks to watch include Citigroup (C, Fortune 500) and Morgan Stanley (MS, Fortune 500). The two companies are in talks about merging their brokerage operations, a source familiar with the negotiations told CNN. Citigroup shares fell 6% while Morgan Stanley shares fell 8%.
World markets: Asian markets ended lower, with Hong Kong's Hang Seng index falling about 3%. European stocks were lower in midday trading.
Oil and money: Oil prices declined on demand concerns. U.S. light crude for February delivery fell $2.15 to $38.68 a barrel on the New York Mercantile Exchange.
The dollar was mixed against major international currencies, slipping against the yen but rising versus the euro and the British pound. 
