Stocks edge lower ahead of earnings season

Stocks edge lower ahead of earnings season; Lufkin soars on GE bid

Associated Press
Stocks edge higher as earnings reports begin
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FILE- In this Thursday, April 4, 2013, file photo, trader Luigi Muccitelli, right, works on the floor of the New York Stock Exchange Thursday, April 4, 2013. Asian stock markets were mixed Monday April 8, 2013 amid concerns about tensions on the Korean Peninsula and bird flu in China, but European stocks rose as traders looked ahead to corporate earnings season in the U.S. (AP Photo/Richard Drew, File)

NEW YORK (AP) -- Stocks edged lower Monday as major U.S. companies prepared to start reporting first-quarter results.

Alcoa will release its results after the markets close Monday. The aluminum company will be the first member of the Dow Jones industrial average to unveil earnings for the quarter. Alcoa rose was unchanged at $8.24.

Analysts expect earnings for companies in the S&P 500 to rise by 0.6 percent from the first quarter of last year. Telecommunications and so-called consumer discretionary stocks are forecast to lead the growth, according to data from S&P Capital IQ. Consumer discretionary stocks include department store chains such as Macy's.

While expectations for the coming reporting period are low, investors will be studying the reports to gauge the outlook for the rest of the year, said Cam Albright, a director of asset allocation at Wilmington Trust Investment Advisors.

"That'll be a critical piece for the markets to digest," he said.

The Dow fell 43 points, or 0.3 percent, to 14,521, in the first half-hour of trading. The Standard & Poor's 500 index declined one point, or 0.1 percent, to 1,552.

Telecommunications and health-care stocks fell the most, down 0.7 percent and 0.4 percent, respectively. Seven of the 10 industry groups in the Standard & Poor's 500 index fell.

The two industry groups have performed well this year, as investors have sought less risky stocks that pay good dividends. Healthcare companies are up almost 16 percent, making them the best performers in the S&P 500.

Lufkin Industries, an oilfield equipment maker, surged $24.15 to $88.07 after General Electric Co. agreed to buy the company for $3 billion. GE wants to bolster its oil and gas operations. Its stock edged 8 cents lower to $22.87.

Monday's stock market declines continued last week's fall. Stocks fell Friday after the government reported a slowdown in hiring that was far worse than economists had expected. The report capped a bad week: The S&P 500 logged its biggest weekly decline of the year as signs emerged that U.S. growth is starting to cool.

In other trading, the Nasdaq composite index dropped two points, or 0.1 percent, to 3,202 on Monday.

The yield on the 10-year Treasury rose to 1.72 percent, after falling as low as 1.69 percent Friday, its lowest level of the year.

The benchmark rate has fallen in the past month as demand for low-risk assets increases.

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