U.S. stocks slipped on Monday on concerns over higher commodity costs denting corporate profits, highlighted by a lowered outlook from consumer products company Kimberly-Clark.
The session was on track for the lowest volume of the year after the long Easter weekend, and margin worries kept the Dow and S&P from building on the gains seen in last week's solid earnings.
About 3.7 billion shares traded on the New York Stock Exchange, the American Stock Exchange and Nasdaq as of midafternoon, below average at this point in the session.
The threat of rising commodity costs was spotlighted by Kimberly-Clark's decline of 2.9 percent to $64.15 after it cut the low end of its full-year outlook, saying the costs of pulp and other goods were rising more than twice as much as it had expected.
Kimberly, maker of Kleenex tissue, is among companies highly vulnerable to rising commodity costs because its products contain oil-based materials and paper.
That is largely in my mind being driven by oil prices, but other commodity prices are driving it too, said Stephen Massocca, managing director at Wedbush Morgan in San Francisco.
That is definitely an issue ... can they pass along price increases to the end-user?
Johnson Controls Inc also fell 2.5 percent to $39.70 after the company, one of the world's largest auto suppliers, said its fiscal third-quarter results would be hit by a drop in car production following the earthquake in Japan. Japan's earthquake has disrupted the supply of auto parts and forced auto companies to idle plants.
Through Monday, 75 percent of the 151 companies in the S&P 500 that have reported results have beaten analysts' expectations. That is just above the average over the past four quarters but well above the average of 62 percent since 1994, according to Thomson Reuters data.
The Dow Jones industrial average <.DJI> fell 25.20 points, or 0.20 percent, to 12,480.79. The Standard & Poor's 500 Index <.SPX> shed 1.68 points, or 0.13 percent, to 1,335.70. The Nasdaq Composite Index <.IXIC> gained 4.37 points, or 0.15 percent, to 2,824.53.
The Nasdaq edged higher, boosted by SanDisk Corp up 2.2 percent to $50.06 after raising its 2011 margin outlook late on Thursday.
But energy and materials companies' shares ranked among the worst performers, with the PHLX oil service sector index <.OSX> off 0.9 percent and the S&P Materials Index <.GSPM> down 0.7 percent. Oil prices fell after U.S. crude hit its highest level since September 2008, as investors took profits on a sell off in silver from near record highs.
The CBOE Volatility Index <.VIX> rose 7.2 percent after falling last week to its lowest level since 2007.
This week is another hectic one for earnings, including Amazon.com , Coca-Cola Co , Microsoft Corp and Exxon Mobil Corp .
The week's agenda includes a two-day meeting of the U.S. Federal Reserve's policymaking committee on Tuesday and Wednesday. Fed Chairman Ben Bernanke will hold the first of four annual press conferences on Wednesday after the Federal Open Market Committee's meeting ends. Investors will look for clues about the direction of monetary policy when the Fed's bond buying program ends in June.
(Reporting by Chuck Mikolajczak; Editing by Kenneth Barry)