U.S. stocks fell as General Electric Co. retreated from a six-year high, leading industrial companies lower while investors awaited this week’s corporate earnings reports.
General Electric Co. slid 3.1 percent, after its biggest rally Friday since 2009. Valero Energy Corp. and Tesoro Corp fell more than 3.8 percent as energy companies dropped. Netflix added 4.4 percent after an analyst upgrade.
The Standard & Poor’s 500 Index declined 0.5 percent to 2,092.43 at 4 p.m. in New York. The Nasdaq Composite Index slipped 0.2 percent, erasing an earlier gain that took it above 5,000 for the first time in three weeks. The Dow Jones Industrial Average lost 80.61 points, or 0.5 percent, to 17,977.04. About 5.5 billion shares changed hands on U.S. exchanges today, 19 percent below the three-month average.
“There’s a lack of economic numbers today, so investors are gearing up for earnings season,” said Stephen Carl, principal and head equity trader at New York-based Williams Capital Group LP. “It remains to be seen if good economic numbers and positive earnings reports will fuel things in a positive vein over the short-term.”
The Nasdaq Composite climbed earlier Monday to within 25 points of its record. Last month the index closed above 5,000 three times, its first forays past that level since March 2000. It stalled on March 20 within seven points of its dot-com-era record, before dropping 2.5 percent to the end of the month. It has rebounded about 2 percent in April after posting its ninth consecutive quarterly gain, its longest streak ever.
The Dow traded Friday within 1.3 percent of a record hit in March, while the S&P 500 pulled within 1 percent of its all-time high. With valuations near their highest level in more than five years, investors are looking to corporate profits for further clues on the strength of the U.S. bull market that hasn’t seen a 10 percent correction since 2011.
JPMorgan Chase & Co., Johnson & Johnson and Intel Corp. are among the 36 S&P 500 members reporting financial results this week. Analysts have slashed their profit projections, predicting a slump through September amid concern that a stronger dollar and tumbling oil prices are hurting results. Earnings probably fell 5.6 percent in the first quarter, they predict.
“We know this earnings season is not going to look good,” said Allan von Mehren, chief analyst at Danske Bank A/S in Copenhagen. “The first quarter’s economic slowdown and stronger dollar has definitely put pressure on profits. The question now will be whether expectations have been lowered enough.”
Investors are also trying to gauge when the Federal Reserve will raise interest rates, with recent economic releases missing projections by the most in six years. March reports are due this week on retail sales, industrial production and housing starts.
Fed Chair Janet Yellen has said that while rates will probably rise this year, any decision depends on economic data. Fed members next meet on April 28-29 to discuss monetary policy.
The Chicago Board Options Exchange Volatility Index rose 11 percent Monday, the most in more than two weeks, to 13.94. The gauge, known as the VIX, fell 14 percent last week to its lowest level of 2015.
GE slipped 3.1 percent, the most in more than a year, to lead industrial companies down 1.1 percent. GE reached a more than six-year high Friday amid an 11 percent rally driven by the company’s plan to buy back as much as $50 billion in stock and sell most of its lending business. Union Pacific Corp. and Lockheed Martin Corp. slipped at least 1.6 percent.
Energy shares retreated 0.8 percent, even as oil prices increased, and utilities lost 1 percent as nine of the S&P 500’s 10 main groups declined.
Netflix led gains in Internet companies, up 4.4 percent after UBS AG analyst Douglas Mitchelson raised shares to buy from neutral. Facebook Inc. rose 1.2 percent, while Priceline Group Inc. advanced 0.9 percent.
Financial shares in the S&P 500 rose 0.3 percent, led by Genworth Financial Inc.’s 2.7 percent climb. JPMorgan Chase & Co. was the Dow’s best performer, up 0.6 percent before its earnings report Tuesday. Huntington Bancshares Inc. paced gains in S&P 500 banks, rising 2.1 percent.
JetBlue Airways Corp. climbed 4.2 percent after saying after the close on Friday that a measure of passenger revenue per available seat mile increased by 8 percent year-over-year for March.