Wall Street retreats from five-year high as focus shifts to earnings
By Angela Moon | January 8, 2013 6:14 AM EST
Stocks fell on Monday as investors cashed in recent gains that lifted the S&P 500 to a five-year high and awaited the start of the fourth-quarter earnings season.
The day's decline was broad across all sectors, but energy and utilities were the top decliners. The S&P 500 energy sector index <.GSPE> fell 1 percent and the utilities sector <.GSPU> was off 1.2 percent.
Another sector in focus was the financials. Financial stocks fell after a group of major U.S. banks agreed to pay billions in settlement with U.S. regulators.
The KBW bank index <.BKX>, a gauge of U.S. bank stocks, was down 0.7 percent.
Earnings are expected to be only slightly better than the third-quarter's lackluster results, and analysts' current estimates are down sharply from where they were in October.
"There is little doubt that concerns about the fiscal cliff created spending hesitancy in both consumers and businesses in the fourth quarter, and it is likely that will adversely impact earnings season," margins are choppy and cost cuts have run their course, said Randy Frederick, managing director of active trading and derivatives at Charles Schwab.
The Dow Jones industrial average <.DJI> was down 76.03 points, or 0.57 percent, at 13,359.18. The Standard & Poor's 500 Index <.SPX> was down 8.40 points, or 0.57 percent, at 1,458.07. The Nasdaq Composite Index <.IXIC> was down 11.89 points, or 0.38 percent, at 3,089.77.
The day's decline came a session after the S&P 500 finished at a five-year high and investors booked profits on stocks' best weekly gain in more than a year, boosted by a budget deal and economic data. The S&P 500 rose 4.6 percent last week.
Ten mortgage servicers - including Bank of America
The bank also entered into agreements with Nationstar Mortgage Holdings
"The settlements may remove any overhang for the stock in the near term, but it only partially satisfies the issue," said Tim Ghriskey, chief investment officer of Solaris Asset Management.
Bank of America shares were down 0.7 percent at $12.02 while Nationstar Mortgage Holdings
Walt Disney Co
Video-streaming service Netflix Inc
Major U.S. technology companies could miss estimates for fourth-quarter earnings as budget worries likely led some corporate clients to tighten their belts last month.
(Reporting By Angela Moon; Editing by Kenneth Barry and Nick Zieminski)
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