Dow component Coca-Cola slumped after the beverage giant posted weaker-than-expected sales, which it blamed on economic malaise and unusually cold and wet weather.
Also, Goldman Sachs was the latest participant in the parade of big U.S. financial institutions to report blowout profits. The company reported earnings per share of $3.70, well ahead of the $2.82 estimates. Revenue also easily beat expectations. Still, shares reversed its initial gains to finish lower.
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Johnson & Johnson posted quarterly earnings and revenue that topped expectations, thanks to strong sales of prescription drugs and medical devices, and lifted its full-year earnings forecast. But shares ended flat.
Yahoo and CSX are among notable companies scheduled to post earnings after the closing bell.
"We know earnings in the second quarter aren't going to be particularly good and we know GDP growth in the second quarter wasn't particularly good, but there's a fair bit of optimism built into the back half of the year and so from our standpoint, we're focused almost entirely on what companies had to say on the second half of the year and what that means for stock prices," said Dan Greenhaus, chief global strategist at BTIG.
Investors will be looking ahead to Fed Reserve Chairman Ben Bernanke's semi-annual testimony to Congress on Wednesday, from which they hope to garner further clues on the direction of monetary stimulus.
"In recent weeks the message that he's given is that we have seen signs of improvements in the U.S. economy and we're going to move towards tapering. Then he gives us the message that we got last week, so I think markets will be cautious ahead of Bernanke's testimony," said Robert Rennie, global head of currency strategy at Westpac.
Meanwhile, Kansas City Fed President Esther George said the central bank should begin to reduce its massive bond-buying program and bring it to a close "sometime in the first half of next year."