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Stocks End Lower Ahead of Earnings; FB Gains

Monday, 9 Jul 2012 | 4:44 PM ET

Stocks eased off their worst levels Monday but still closed in negative territory as investors remained jittery ahead of the earnings season and amid renewed global growth concerns.

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S&P 500
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The Dow Jones Industrial Average slipped 36.18 points, or 0.28 percent, to end at 12,736.29, led by DuPont and Caterpillar. The blue-chip is down for the sixth-straight Monday.

The S&P 500 lost 2.22 points, or 0.16 percent, to finish at 1,352.46. The Nasdaq erased 5.56 points, or 0.19 percent, to close at 2,931.77.

The CBOE Volatility Index, widely considered the best gauge of fear in the market, climbed above 18.

Most key S&P sectors finished in the red, led by energy, while health care eked out a small gain.

“We want to see if there’s a follow-through into earnings from the economic data we’ve seen which has been considerably weaker than it was earlier this year,” said Jason Pride, director of investment strategy at Glenmede. “We’re in the midst of a summer slowdown like we had in the past two years.”

Alcoa kicks off the earnings season after the close. The aluminum giant is expected to earn 5 cents a share, according analysts surveyed by Reuters.

“One of the things we want to pay attention to this earnings season is if we see a pickup of cancellation orders across the board, which would indicate uncertainty,” said Quincy Krosby, market strategist at Prudential Financial. “So you are going to see the analysts digging deeper in these calls and watching all the data points globally to look for the inflection-point guide.”

ECB President Mario Draghi said he is open to further interest rate cuts, saying the bank would make any decision on further action based on economic data. Draghi's comments follow last week's rate cuts.

Euro zone finance ministersare scheduled to meet in Brussels to further hammer out plans to reinforce the single currency but experts say their talks may do little more than highlight the limitations of last month's deal to help indebted states and banks. European markets finished lower for the fourth-straight session.

Shares fell sharply last Fridayas another month of tepid jobs growth underlined fears the economy was stalling, although it raised hopes for a further easing in monetary policy by the Federal Reserve.

Time to be Bearish?
The man who nailed the S&P call last year is now out with a bearish forecast. Jonathan Golub, UBS chief U.S. equity strategist, explains.

Chicago Federal Reserve Bank President Charles Evans, one of the Fed's most dovish policymakers, said U.S. policymakers should unleash a new round of bond purchases to bring down unemployment, even at the risk of driving inflation temporarily higher.

China's annual consumer inflationcooled more than expected to 2.2 percent in June, from May's 3.0 percent, giving Beijing more scope to ease monetary policy to support growth without stoking upward price pressures.

The news comes after China's central bank unexpectedly cut benchmark interest rates last week for the second time in a month in a bid to bolster growth.

U.S. consumer credit grew by $17.12 billion in May, according to the Federal Reserve, its biggest expansion in five months. Economists surveyed by Reuters had expected an expansion of $8.5 billion. Revolving credit grew by $8.01 billion, the biggest gain since November 2007.

Facebook rallied following news that the social-networking giant is planning on launching a jobs posting board. However, shares of LinkedIn tumbled.

Semiconductors including Micron and Broadcom pulled back following a report that showed spending on machines for making semiconductor chips will decline this year, according SEMI, a trade group representing the industry.

In corporate news Celgene is one of two companies discussing whether to bid for HumanGenome Sciences , which seeks an alternative to a hostile offer by British drugmaker GlaxoSmithKline , according to sources.

Also on the M&A front, WellPoint will buy rival Amerigroup for about $4.46 billion.

And Campbell Soup plans to acquire Bolthouse Farms for $1.55 billion in cash, in an attempt for the packaged food and beverage giant to make their products healthier.

Meanwhile, PepsiCo will start selling yogurt in the Northeast and mid-Atlantic states later this month, according to the New York Times, in an effort by the beverage giant to curb its reliance on soda sales.

—By CNBC’s JeeYeon Park (Follow JeeYeon on Twitter: @JeeYeonParkCNBC)

Coming Up This Week:

TUESDAY: NFIB small biz optimism index, 3-yr note auction, RIM annual mtg
WEDNESDAY: Weekly mortgage apps, international trade, wholesale trade, oil inventories, 10-yr note auction, FOMC minutes; Earnings from Marriott, Chevron interim results
THURSDAY: Jobless claims, import & export prices, Fed Pres Williams speaks, 30-yr bond auction, Treasury budget, Facebook hearing; Earnings from Fastenal
FRIDAY: PPI, consumer sentiment, Fed pres Lockhart speaks, Dell shareholders mtg; Earnings from JPMorgan, Wells Fargo

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