US stocks mixed as earnings season gets underway

NEW YORK—US stocks closed mostly lower Monday ahead of the start of the corporate earnings season and a week packed with economic reports.

The Dow Jones Industrial Average managed to eke out a 1.06 point (0.01 percent) gain to finish the day at 12,381.11.

The tech-rich Nasdaq Composite fell 8.91 points (0.32 percent) to 2,771.51, while the S&P 500-stock index, a broad measure of the markets, dropped 3.71 points (0.28 percent) to 1,324.46.

“Stocks finished mixed and little changed as the trading session was met with some caution ahead of the beginning of 1Q earnings season, which unofficially started after the closing bell with Dow member Alcoa reporting a profit that was a penny ahead of forecasts,” Charles Schwab analysts said in a client note.

The aluminum giant closed 0.84 percent lower at $17.77, before reporting a swing back to profit for the January-March period compared with a year ago and a “very positive” earnings outlook for this year and beyond.

“Market watchers will be looking closely to see if trading volume increases with the arrival of earnings season in order to assess investor sentiment and willingness to put cash to work,” Briefing.com analysts told clients.

Andrea Kramer at Schaeffer’s Investment Research said that Wall Street sentiment found support from “a round of buyout announcements.”

Endo Pharmaceuticals added 0.51 percent at $41.06 after announcing it would buy American Medical Systems for $2.9 billion, including debt. AMS soared 32.11 percent to $29.50.

Internet provider Level 3 Communications said it is acquiring networking company Global Crossing in a stock deal valued at $3 billion. Level 3 leaped 18.06 percent to $1.70, while Global Crossing skyrocketed 68.72 percent to $24.97.

Investors will have a full economic calendar to digest this week, including the trade balance on Tuesday, followed by retail sales on Wednesday and key inflation numbers on Thursday and Friday.

On Wednesday the Federal Reserve is set to publish its periodic Beige Book assessment of the regional economies.

The Wall Street action came after stocks ended last week on a weak note. On Friday, President Barack Obama’s Democrats cut an 11th-hour budget deal with opposition Republicans that averted a government shutdown, but not before weighing on equities.

The Dow slipped 0.24 percent, the S&P 500 lost 0.40 percent and the Nasdaq shed 0.56 percent.

The bond market stalled Monday. The yield on the 10-year Treasury was 3.57 percent, unchanged from Friday, while that on the 30-year bond stood at 4.63 percent, a tick higher.

Bond prices and yields move in opposite directions.