U.S. stocks lost ground on Monday, with the Dow and S&P 500 heading for a third straight session of losses, as a once-buoyant market sagged at the start of the earnings season.
The euro zone debt crisis weighed on Wall Street sentiment, stealing the spotlight from merger activity in the United States and financial results for the fourth quarter.
Aluminum company Alcoa Inc
The European Central Bank threw Portugal a temporary lifeline on Monday by buying its bonds, traders said, as pressure mounted for Lisbon to seek an international bailout soon.
There is no question, that there has been no long-term structural fix there, said Peter Kenny, managing director at Knight Equity Markets in Jersey City, New Jersey.
It's almost as if it's looked at as a catalyst to lock in profits, and once it recedes from the headlines, you start seeing a little more robust tone to the market.
Topping the list of deals announced on Monday, Duke Energy Corp
Shares of Progress slid 2.2 percent to $43.75, and Duke fell 2.1 percent to $17.42. DuPont, a Dow component, fell 3.4 percent to $48.06.
The Dow Jones industrial average <.DJI> fell 51.28 points, or 0.44 percent, at 11,623.48. The Standard & Poor's 500 Index <.SPX> slipped 4.99 points, or 0.39 percent, at 1,266.51. The Nasdaq Composite Index <.IXIC> lost 9.50 points, or 0.35 percent, at 2,693.67.
Education stocks slipped after Strayer Education Inc
Strayer shares plunged 22.9 percent to $118.22. Corinthian Colleges Inc
Markets had advanced before the earnings season. Last week the Dow and S&P notched a sixth straight week of gains, while the Nasdaq rose 1.9 percent.
But on Monday the benchmark S&P 500 was on track for its first three-day string of losses since late November.
If we had gotten overextended going into earnings, it might have been cause for a pullback ... At least we are setting the table for opportunity on the upside, said Kenny, referring to stocks' weakness of the past three sessions.
(Reporting by Chuck Mikolajczak; Editing by Kenneth Barry)