By Barbara Kollmeyer, MarketWatch
NEW YORK (MarketWatch) -- The U.S. stock market edged lower on
Tuesday as investors remained reluctant to make big bets ahead of
the earnings season.
Cautious mood was prevalent globally as European stocks as well
as Treasury yields declined.
The S&P 500 (SPX) was down 5 points, or 0.3%, at 1,960. The
Dow Jones Industrial Average (DJI) dropped 50 points, or 0.3%, to
16,940. The Nasdaq Composite (RIXF) fell 10 points, or 0.3%, to
4,445.
Trading was choppy on Monday, with the S&P 500 (SPX) closing
down 0.2% to 1,964.82, and the Russell 2000 (RUT) falling nearly
1%. The S&P 500 dropped below its 50-day moving average last
week and has yet to move back above that level. Read: U.S. stocks
test key technical levels
Tuesday's light data schedule includes August job openings at 10
a.m. Eastern Time and August consumer credit at 3 p.m. Eastern
Time.
Minneapolis Fed President Narayana Kocherlakota, a voting member
of the Fed policy committee this year, will give a speech on
"clarifying the objectives of monetary policy" in Rapid City, South
Dakota, at 2:30 p.m. Eastern. Simon Potter, head of the markets
group at the New York Fed, will speak at a conference in New York
at 4:30 p.m. Eastern.
Kansas City Fed President Esther George said in a speech in
Albuquerque, N.M. on Monday that "the time had come" for Fed
officials to start talking seriously about lifting short-term
rates, The Wall Street Journal reported.
Braced for earnings: Yum! Brands Inc. (YUM) will report
quarterly results after the close Tuesday, but the third-quarter
earnings season won't be in full swing until next week. Alcoa Inc.
(AA) will report Wednesday.
Burt White, chief investment officer at LPL Financial, and
Jeffrey Buchbinder, market strategist at the same company, said in
a note Tuesday they expect "another good earnings season" that is
likely to boost stocks.
They listed several reasons for optimism in the current
reporting season: U.S. economic growth has picked up; upside
earnings surprises have been typical since summer 2009; the
Institute for Supply Management manufacturing Index, which has a
strong track record of predicting earnings growth six months out,
has shown solid growth in the past six months; and there have been
few signs of cost pressures. Also 'Sell Rosh Hashanah, buy Yom
Kippur' worked this year.
Stocks to watch: SodaStream International Inc. (SODA)shares sank
18% in heavy volume ahead of the bell, hit hard as the
carbonated-drinks equipment maker warned of a quarterly-sales
shortfall.
The Container Store Inc. (TCS) shares fell 14% premarket,
extending their slide late Monday after the storage-organization
retailer cut its profit and sales view.
The European Commission has opened an investigation into Amazon
Inc.'s (AMZN) tax arrangement in Luxembourg. Amazon shares were off
0.8%.
Women's clothing retailer Christopher & Banks Corp. (CBK)
forecast quarterly sales below Wall Street's estimate, sending
shares down 23%.
Agco Corp. (AGCO) shares stumbled 6.6% as the
agricultural-equipment company cut its profit outlook for the year
because of weaker-than-expected demand.
Other markets: European markets were lower after another round
of downbeat German data. Asian stocks had a mixed session, with the
Nikkei 225 index down 0.7%, but Hong Kong's Hang Seng index rose
0.5%. Gold prices (GCZ4) edged just above the key $1,200-an-ounce
level. Oil futures (CLX4) slipped, trading below $90 a barrel.
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