U.S. stocks closed slightly lower Monday with energy leading decliners and defensive sectors among the leaders, ahead of major central bank meetings and earnings due later in the week.
The Nasdaq composite posted its first three-day losing streak since Feb. 9. (Tweet This)
"It's still pressure on equity prices as a consequence of really mixed earnings so far. The tech (sell-off Friday is) really on investors minds," Mark Luschini, chief investment strategist at Janney Montgomery Scott, said, noting some anxiety in the market ahead of Apple's earnings.
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The iPhone maker is scheduled to post quarterly results after the close Tuesday. Other earnings due in the next few days include Boeing, Facebook and Amazon.com. The Federal Reserve and Bank of Japan both meet later in the week.
"Today's a quiet before the storm. ... I think guys are clipping profits ahead of it," said Jeremy Klein, chief market strategist at FBN Securities.
"We made a run at the November highs (in the S&P last week). You weren't going to get through the first time. Earnings have been a little soft," he said.
Consumer staples, telecoms and utilities were the top S&P gainers, while energy closed almost 1.1 percent lower as the greatest laggard. In the close, telecoms edged out energy as the best performing sector year-to-date.
Financials remained the worst performer for the year so far, followed by health care. Information technology held in positive territory for 2016 after briefly falling into the red.
The Dow Jones industrial average closed about 26 points lower after earlier falling 148 points. Goldman Sachs and Caterpillar contributed the most to declines, while McDonald's was the top contributor to gains.
The Dow transports closed nearly 1.2 percent lower, with Avis Budget leading decliners.
"I think investors are going to be on edge and the main action is going to be on the FOMC and Bank of Japan later in the week," said Peter Cardillo, chief market economist at First Standard Financial.
The Federal Open Market Committee is not expected to move on interest rates at its meeting scheduled for this Tuesday and Wednesday, but investors will scrutinize the statement for indications on the potential for a hike at the June meeting.
The Bank of Japan is due to release its statement on monetary policy Thursday.
The U.S. dollar index held about 0.3 percent lower, with the euro near $1.126 and the yen at 111.22 yen against the greenback.
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Treasury yields were mostly higher, with the briefly near 0.83 percent, its highest since March 29, and the 10-year around 1.9 percent, its highest since March 28.
The Treasury auctioned $26 billion in two-year notes at a high yield of 0.842 percent. The bid-to-cover ratio, an indicator of demand, was 2.64, versus a recent average of 3.05.
New home sales in March fell 1.5 percent to a seasonally adjusted annual rate of 511,000.
Shares of Microsoft and Alphabet closed about 0.6 percent higher Monday after plunging more than 5 percent Friday, when the Nasdaq composite fell nearly 1 percent. As of Monday's close, the index was 6.4 percent below its 52-week intraday high and 2.2 percent lower year-to-date.
The Dow closed below the psychologically key 18,000 level after holding above Friday. The Dow and S&P 500 posted two-straight weeks of gains last week and remained about 2 percent below their 52-week intraday highs in Monday's close.
"I think this advance is starting to get to those levels (where) you start to ask questions," said James Meyer, chief investment officer at Tower Bridge Advisors.
Before Monday's open, Xerox posted earnings that missed and cut its full-year earnings forecast due partly to expenses related to its planned breakup. Revenue beat expectations but still fell 4.2 percent, hurt by a strong dollar and lower sales of printers and copiers. Shares closed 13.3 percent lower.
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Private-equity firm KKR reported its second loss in quarterly earnings in less than a year as volatile financial markets dragged on the value of its investments. The stock closed 3 percent lower.
Halliburton said it cut 6,000 jobs in the first quarter. The oilfield services giant delayed its earnings report from Monday morning to next month as it works on clearing regulatory hurdles for its planned merger with rival Baker Hughes. Shares of Halliburton fell nearly 2 percent, while Baker Hughes declined almost 3 percent.
U.S. crude oil futures settled down $1.09, or 2.49 percent, at $42.64 a barrel.
Saudi Arabia's government unveiled a 15-year plan Monday that included regulatory, budget and policy changes aimed at making the kingdom less reliant on crude.
Major U.S. Indexes
European stocks ended about half a percent lower or more, with bank stocks underperforming.
Asian stocks closed lower with the Nikkei 225 off almost 0.8 percent.
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The Dow Jones industrial average closed down 26.5 points, or 0.15 percent, at 17,977.24 with Caterpillar leading decliners and McDonald's the top gainer.
The closed down 3.79 points, or 0.18 percent, at 2,087.79, with energy leading six sectors lower and consumer staples leading advancers.
The Nasdaq composite closed down 10.44 points, or 0.21 percent, at 4,895.79.
The CBOE Volatility Index (VIX), widely considered the best gauge of fear in the market, climbed above 14.
About two stocks declined for every advancer on the New York Stock Exchange, with an exchange volume of 865 million and a composite volume of nearly 3.3 billion in the close.
Gold futures for June delivery settled up $10.20 at $1,240.20 an ounce.
—CNBC's Peter Schacknow and Reuters contributed to this report.
On tap this week:
Tuesday
Federal Open Market Committee begins two-day meeting.
Earnings: 3M, Bayer, BP, DuPont, Eli Lilly, Fiat Chrysler, Procter & Gamble, Apple, AT&T, eBay, Aflac, Akamai, Ashland, Capital One, Chipotle Mexican Grill, Edwards Lifesciences, Twitter, Buffalo Wild Wings, Cree, Panera Bread, U.S. Steel
8:30 a.m. Durable goods
9 a.m. S&P/Case-Shiller
9:45 a.m. Services PMI
10 a.m. Consumer confidence
1 p.m. $34 billion five-year note auction
Wednesday
Earnings: Boeing, Comcast, GlaxoSmithKline, Mondelez Intl., Total, United Tech., Dr. Pepper Snapple, Facebook, Paypal, Ameriprise, Marriott, SanDisk (being bought by WDC), Texas Instruments, Cheesecake Factory
8:30 a.m. International trade
10 a.m. Pending home sales
2 p.m. FOMC statement
Thursday
Earnings: AbbVie, Altria, Bristol-Myers Squibb, Celgene, Colgate-Palmolive, ConocoPhillips, Deutsche Bank, Dow Chemical, Ford, Honda Motor, MasterCard, UPS, Volkswagen, Aetna, CME Group, Domino's Pizza, Marathon Petroleum, Sirius XM Radio, Sony, Time Warner Cable, Viacom, Waste Management, Beazer Homes, Cliffs Natural Resources, Dunkin Brands, Amazon.com, Amgen, Baidu, Gilead Sciences, Samsung Electronics, Eastman Chemical, Expedia, Hartford Fincl., Juniper Networks, LinkedIn, Western Digital, Groupon, LPL Financial, Outerwall, Pandora Media
8:30 a.m. Jobless claims
8:30 .m. Real GDP Q1
10 a.m. Housing vacancies
1 p.m. $28 billion seven-year note auction
Friday
Earnings: AstraZeneca, Chevron, Exxon Mobil, Novo Nordisk, Sanofi
6:30 a.m. Dallas Fed President Rob Kaplan
8:30 a.m. Personal income; employment cost index
9:45 a.m. Chicago PMI
10 a.m. Consumer sentiment
*Planner subject to change.
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