Stocks slid on Monday as energy shares sold off on lower crude oil prices and on fears that corporate earnings may not justify a big run-up in stocks.
Investors are worried that increased raw material costs and a possible slowdown from Japan's earthquake may start to show up in earnings, and companies' forward-looking statements will be scrutinized carefully.
Aluminum maker Alcoa Inc
We say at each quarter that the outlook is going to be more important than the actual earnings but this time seems to be like it is going to be even more so, said Scott Marcouiller, chief technical market strategist at Wells Fargo Advisors in St. Louis
Profit-taking in oil after U.S. crude futures hit a 30-month high sparked selling in energy shares. Occidental Petroleum
The Dow Jones industrial average <.DJI> was down 27.17 points, or 0.22 percent, at 12,352.88. The Standard & Poor's 500 Index <.SPX> was down 6.99 points, or 0.53 percent, at 1,321.18. The Nasdaq Composite Index <.IXIC> was down 18.39 points, or 0.66 percent, at 2,762.03.
U.S. crude oil futures ended 2.5 percent lower as investors heeded a recommendation from top brokerage Goldman Sachs that they take profits after the recent rally.
Profits for S&P 500 companies are seen rising 11.4 percent from a year ago, according to Thomson Reuters data, but much of that may be priced into shares. The S&P 500 is up over 5 percent this year.
Optimism over earnings contributed to recent gains, despite turmoil in oil-producing regions and the disasters in Japan. Despite the S&P 500's gains this year, light trading volume has prompted questions about the strength of the rally.
Alcoa shares slid 1.4 percent to $17.67 after rising earlier. The company is seen posting growth in both earnings and revenue. JPMorgan Chase & Co
In corporate news, Tenet Healthcare Corp
Shares of Tenet sank 13.6 percent to $6.52 while Community slumped 34 percent to $26.70.
NYSE shares fell 2.9 percent to $37.57 while Nasdaq OMX fell 2 percent to $27.87 and ICE was 0.3 percent lower at $120.13.
Also in deal news, Endo Pharmaceuticals Holding Inc
Endo fell 0.4 percent to $40.70 while American Medical jumped 32 percent to $29.46. Level 3 rose 11.8 percent to $1.60 and Global Crossing surged 59 percent to $23.54.
Biogen Idec Inc
(Editing by Leslie Adler)