Stocks Close Lower Amid Economic Worries
Stocks ended lower in light, choppy trading Monday, amid ongoing worries over the slowing economy and ahead of Fed Chairman Ben Bernanke's speech later this week.
“It’s a headline-driven market and we need a headline,” said Brian Battle, vice president of trading a Performance Trust Capital Partners, of the quiet trading day. “We’ll be watching Bernanke later on this week and more earnings.”
Shortly after the closing bell, Yahoo named former Google executive Marissa Mayer as its new president and CEO. Mayer will start her new role at Yahoo on Tuesday. Most analysts had expected Yahoo to hire interim CEO Ross Levinsohn for the permanent position.
The Dow Jones Industrial Average fell 49.88 points, or 0.39 percent, to close at 12,727.21, finishing lower for the seventh Monday in a row. JPMorgan and Home Depot led the blue-chip laggards.
The S&P 500 erased 3.14 points, or 0.23 percent, to finish at 1,353.64. The Nasdaq slipped 11.53 points, or 0.40 percent, to end at 2,896.94.
The CBOE Volatility Index, widely considered the best gauge of fear in the market, ended slightly above 17.
Among the key S&P sectors, industrials and consumer discretionary lagged, while energy and telecoms finished higher.
Citigroup held small gains after the financial giant posted quarterly earnings that topped expectations. But revenue was slightly lighter than expected. (Read More: Dennis Gartman—Now’s the Time to Buy Banks)
Citigroup's earnings came after Wall Street cheered better-than-expected reports from both JPMorgan and WellsFargo last week.
Several companies, especially in the tech sector, have warned on profitsin recent weeks. Negative to positive earnings guidance for the second quarter is 3.3 to 1, the worst since 2008, according to data from Thomson Reuters.
“We’re in that pre-earnings moment of fear when a lot of investors assume a defensive crouch,” said Lawrence Creatura, portfolio manager at Federated Investors. “People appear overly cautious and stocks look somewhat inexpensive…it doesn’t take a lot of good news to propel stocks higher because investors appear to be braced for such incredible headwinds.”
Market focus this week will be on Federal Reserve Chairman Ben Bernanke as he gives his semi-annual report before the Senate Banking Committee on Tuesday and House Committee on Wednesday. Investors will listen for any hints of further stimulus measures.
"If the market doesn’t get the clear signal it wants tomorrow from Bernanke in reference to QE3, it will stamp its feet (like a toddler that doesn’t get his way) and we could see Friday’s gains evaporate," wrote Elliot Spar, senior vice president at Stifel Nicolaus, in his daily note.
Stocks opened lower after Chinese Premier Wen Jiabao said China's economy has not yet entered a recovery and "economic difficulties may continue for some time," but promised he would use further measures to help struggling sectors. His comments follow China's GDP report that showed economic growth fell to a three-year low in the second quarter.
Meanwhile, the IMF lowered its global growth forecastand warned that outlook could dim further if policymakers in Europe do not act to quell the region's debt crisis.
On the economic front, retail sales fell for the third-consecutive month, according to the Commerce Department. Meanwhile, business inventories gained in Mayto $1.58 trillion.
Also on the economic front, a gauge of manufacturing in New York state rebounded in July, according to the New York Fed's "Empire State" index.
Also among earnings, Gannett rose after the publisher of USA Today topped earnings expectations. But the company reported lower quarterly revenue amid the ad slump in the newspaper industry.
Alpha Natural Resources tumbled more than 10 percent after the BMO Capital Markets cut its rating on the coal producer to "underperform" from "outperform." The brokerage also lowered its rating on rival Arch Coal to "underperform" from "market perform."
Human Genome rallied after the biotech company agreed to be acquired by GlaxoSmithKline in a deal worth $3 billion, or $14.25 a share.
Also on the M&A front, Par Pharmaceutical skyrocketed after private-equity firm TPG said it would acquire the generic drug company for $1.9 billion, or $50 a share.
Comcast bought out Microsoft's 50 percent stake in MSNBC.com for a reported $300 millionto assume full control of the news website. Comcast is the parent company of NBCUniversal.
European shares closed loweras investors took profits on a 6-week run of gains. (Read More: Why Investors Cannot Ignore Greece)
—By CNBC’s JeeYeon Park (Follow JeeYeon on Twitter: @JeeYeonParkCNBC)
Coming Up This Week:
TUESDAY: CPI, treasury int'l capital, industrial production, housing market index, Ben Bernanke speaks, Cleveland Fed Pres speaks, Google Ideas conf.; Earnings from Coca-Cola, Goldman Sachs, J&J, Mattel, Intel, Yahoo, CSX
WEDNESDAY: Weekly mortgage apps, housing starts, Ben Bernanke speaks, Fed's Beige Book; Earnings from BofA, Abbott Labs, Honeywell, PNC Bank, USBancorp., AmEx, IBM (tentative), Qualcomm, Ebay, Yum Brands
THURSDAY: Jobless claims, existing home sales, Philadelphia Fed survey, leading indicators; Earnings from Morgan Stanley, Novartis, Philip Morris, Travelers, Verizon, AutoNation, BB&T, Blackstone, Nokia, Southwest Airlines, Google, Microsoft, AMD, Capital One, Chipotle, ETrade, Sandisk
FRIDAY: Fender and Kayak trading debut; Earnings from GE, Schlumberger, Xerox
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