U.S. stocks fell on Monday on signs some corporate outlooks were being strained by concerns over higher raw material costs, including consumer products maker Kimberly-Clark Corp.
The market's decline in a low-volume session followed some strong earnings last week, which helped pushed the Dow to a closing high for the year. The S&P 500 has moved to the top end of its recent trading range where it is facing resistance.
Kimberly-Clark sank 2.9 percent to $64.13 and was one of the S&P 500's top percentage decliners after it cut the low end of its full-year outlook, saying the cost of pulp and other goods were rising more than twice as much as it had expected.
The Kleenex tissue maker is one of the companies most exposed to rising commodity costs because its products contain oil-based materials and paper.
Johnson Controls Inc fell 3.3 percent to $39.38 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.
There are some legitimate inflation concerns among investors related to raw material prices, which could put pressure on margins later in the year, said John Carey, portfolio manager of Pioneer Investment Management in Boston, which has about $260 billion in assets under management.
Of S&P 500 companies that have reported results so far, 75 percent beat 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.
Helping the Nasdaq, SanDisk Corp rose 1.6 percent to $49.81 after raising its 2011 margin outlook late on Thursday.
The Dow Jones industrial average <.DJI> was down 34.40 points, or 0.28 percent, at 12,471.59. The Standard & Poor's 500 Index <.SPX> was down 2.89 points, or 0.22 percent, at 1,334.49. The Nasdaq Composite Index <.IXIC> was up just 0.10 of a point, or unchanged on a percentage basis, at 2,820.26.
Energy and materials companies' shares ranked among the weakest of the session, with the S&P Energy Index <.GSPE> down 0.7 percent and the S&P Materials Index down 0.6 percent. Crude oil futures prices fell after hitting their highest level since September 2008 earlier in the session, while silver reversed course after a sharp rally.
The CBOE Volatility Index <.VIX>, known as the VIX, rose 7.8 percent after falling last week to its lowest level since 2007.
This week is another hectic one for earnings with 180 S&P 500 companies set to report, 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.
Traders noted that activity would likely be subdued as many major European markets remain closed over the long Easter weekend. About 2.92 billion shares traded on the New York Stock Exchange, the American Stock Exchange and Nasdaq as of midday, below average for this point in the session.
(Reporting by Ryan Vlastelica; Editing by Jan Paschal)