US 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 eurozone 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 is scheduled to be the first Dow component to report results after the market's close. The stock edged up 0.7 percent to $16.54. 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 agreed to buy Progress Energy Inc for $13.7 billion in stock. DuPont plans to buy Danisco, a Danish food ingredient firm, for $5.8 billion. 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 fell 51.28 points, or 0.44 percent, at 11,623.48. The Standard & Poor's 500 Index slipped 4.99 points, or 0.39 percent, at 1,266.51. The Nasdaq Composite Index lost 9.50 points, or 0.35 percent, at 2,693.67. Education stocks slipped after Strayer Education Inc said new enrolments at its university fell 20 percent in the winter term, signalling another tough quarter ahead from US for-profit colleges.
Strayer shares plunged 22.9 percent to $118.22. Corinthian Colleges Inc tumbled 11.7 percent to $4.66, and Apollo Group Inc, which is set to post earnings after the close, lost 5.3 percent to $35.96. 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.
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