Stocks slip, ahead of quarterly reports

NEW YORK - After pushing stocks to records last week, investors turned cautious Monday ahead of a batch of corporate earnings reports.

The Dow Jones industrial average ended almost 50 points lower after closing last week above 17,000 for the first time. Investors moved money into stocks traditionally thought of as safer than the broader market: utilities, telecommunication companies, and such consumer staples as soft drinks and detergent.

Stocks that depend the most on a growing economy were among the biggest decliners, including small companies, consumer discretionary names, materials, and industrial stocks.

"All eyes have turned to earnings," said Joe Tanious, global-market strategist with JPMorgan Funds. "Companies were able to post 6 percent earnings growth in the first quarter, even with the U.S. economy contracting. Now that we've seen a rebound in economic activity, I think we're looking at a pretty good earnings season."

Investors largely believe the weather had an unusually large impact on the U.S. economy in the first three months of the year, and that economic activity rebounded in the second three months of this year. Many companies blamed the weather for their disappointing first-quarter results.

Also, stocks are trading at all-time highs, and investors will need corporate America to deliver on profits in order to justify these record-high prices.

Aluminum mining giant Alcoa was to report its latest results Tuesday, and Wells Fargo, the No. 1 U.S. mortgage lender, is to report Friday. Investors are expecting second-quarter profits to be up 4.9 percent from a year ago, according to FactSet.

On Monday, the Dow Jones industrial average lost 44.05 points, or 0.3 percent, to 17,024.21. The Standard & Poor's 500 index lost 7.79 points, or 0.4 percent, to 1,977.65, and the Nasdaq composite fell 34.40 points, or 0.8 percent, to 4,451.53.

The Dow reached a record and a new 1,000-point milestone Thursday by closing above 17,000 for the first time. That followed a strong U.S. jobs report. U.S. markets were closed Friday for Independence Day.

The Russell 2000 index, which is made up primarily of small-company stocks, fell more than the rest of the market. The index lost 1.7 percent, vs. the 0.4 percent decline in the S&P 500, which is made up of large companies.

Investors also tried to reduce their exposure to risk by buying U.S. government bonds. The yield on the U.S. 10-year note fell to 2.62 percent from 2.64 percent late Thursday.