Blue chips and the broad Standard & Poor's 500 index sagged on Monday as investors waited to see whether first-quarter earnings will match their lofty expectations, while technology shares snapped back from a steep four-session sell-off.
Fast-food chain McDonald's Corp weighed on the Dow after the sudden death from an apparent heart attack of its chairman and chief executive, Jim Cantalupo. The company said President and Chief Operating Officer Charlie Bell was named CEO to succeed Cantalupo.
Gillette Co also fell sharply amid speculation that CEO James Kilts could be picked to replace Coca-Cola Chairman and Chief Executive Douglas Daft, who is retiring at the end of the year. Its shares fell 4 percent.
"You haven't had a lot of great earnings reports out, and I think the market's just treading sideways here," said Christopher Wolfe, equity market strategist at J.P. Morgan Private Bank. "It's a bit of just re-balancing," he said, adding that many of the blue chips gained ground last week.
The Dow Jones industrial average fell 40 points, or 0.38 percent, to 10,412. The Standard & Poor's 500 Index was down 3 points, or 0.26 percent, at 1,132. The technology-laced Nasdaq Composite Index rose 9 points, or 0.44 percent, to 2,005.
Strong earnings from 3M, Wachovia and Eli Lilly were not enough to boost the Dow and the S&P 500 as Wall Street braced for a slew of corporate results in what will be one of the busiest weeks of the earnings period.
"Tomorrow is a huge day as far as earnings are concerned, so I think people aren't really going to jump in until they see the earnings," said Todd Leone, head of listed trading at S.G. Cowen.
Fears the Federal Reserve will raise interest rates sooner than had been previously expected to rein in inflation have weighed on the market as investors worry higher rates could put the brakes on the rebounding economy.
A report from the Conference Board on Monday said the US economy is gaining momentum and is on an upward trend that should boost second-quarter growth.
In corporate news, McDonald's was the Dow's biggest percentage loser. Its shares fell 62 cents, or 2.3 percent, to $26.84 on the New York Stock Exchange. Cantalupo, 60, died of an apparent heart attack at the company's owner/operator convention in Orlando, Florida.
3M Co said first-quarter earnings rose, helped by the weaker dollar and strong demand for film that boosts the brightness of displays in laptops, cell phones and flat-panel televisions.
3M, whose products range from Post-It notes and Scotch tape to drugs and roofing granules, fell 8 cents to $83.65.
Wachovia Corp, the No 4 US bank, on Monday said first-quarter profit rose 22 percent, more than analysts expected, as consumer lending and investment management fees rose and bad loans fell sharply. Its shares rose 8 cents to $44.83.
Eli Lilly and Co said first-quarter earnings excluding costs from an acquisition rose sharply, beating forecasts, as new drugs helped push sales 17 percent higher. Shares of Eli Lilly rose 85 cents, or 1.2 percent, to $73.30.