Stocks head lower, pushing S&P 500 down from high

NEW YORK (AP) ? Stocks sank on Wall Street, pushing the Standard & Poor's 500 index down from the five-year high it reached Friday.

The move lower on Monday is likely the result of investors taking some winnings off the table after the stock market's surge last week, said Sam Stovall, chief equity strategist at S&P Capital IQ.

Investors are also preparing for corporate America's seasonal parade of earnings reports, which starts Tuesday.

"You can summarize it as profit-taking and preparation," Stovall said. "Investors are digesting some of those gains from last week and positioning themselves so they're not too far extended if fourth-quarter earnings slip a bit."

The S&P 500 dropped eight points to 1,458 as of 12:20 p.m. EST on Monday.

The Dow Jones industrial average fell 75 points to 13,359, while the Nasdaq composite fell nine points to 3,092.

Bank of America sank after the bank said it had reached an agreement to settle claims from the government agency Fannie Mae over mortgage investments that lost value after the housing crash. Bank of America will pay the agency $3.6 billion and buy back $6.75 billion in loans that the North Carolina-based bank and its Countrywide unit sold to agency from Jan. 1, 2000 through Dec. 31, 2008. The bank's stock fell 8 cents to $12.02.

The S&P 500 closed at a five-year high Friday after a report showed that hiring held up in December during the tense fiscal negotiations in Washington, with employers adding 155,000 jobs in the month. Stocks surged at the start of last week after lawmakers passed a bill to avoid a combination of government spending cuts and tax increases that came to be known as the "fiscal cliff." The law passed late Tuesday night averted that outcome, which could have pushed the economy back into recession.

Investors are now shifting their focus to corporate profits. Aluminum producer Alcoa launches the reporting season for the fourth quarter of 2012 after the market closes on Tuesday.

Analysts forecast that companies in the S&P 500 will report that quarterly earnings grew 3.3 percent from the same period the year before, according to S&P Capital IQ. But all the events that took place in the last three months of 2012 -- Superstorm Sandy, the presidential election, and worries about the narrowly avoided "fiscal cliff" -- could make for some surprises.

In other trading, the yield on the 10-year Treasury note fell 1 basis point to 1.89 percent. The yield on the note hit an eight-month high of 1.97 percent in intraday trading Friday, according to prices from Tradeweb, an operator of fixed-income markets.

Among other stocks making big moves:

? Archer Daniels Midland dropped 3 percent. Analysts at JP Morgan Chase said the ongoing drought in the Midwest will likely squeeze the crop-processing company's profit margins. The analysts also started coverage on ADM's stock with a price target of $28, below where it opened for trading Monday. ADM fell 85 cents to $28.37.

? Lowe's Cos. fell $1.05 to $34.53 after analysts at the money-management firm Canaccord cut their rating on the company to "sell" from "hold," saying that the home improvement company's efforts to improve stores and sales won't be successful.

? Walgreen Co. gained 73 cents to $37.91 after Jefferies analyst Scott A. Mushkin raised his rating on the drugstore chain to "buy" from "hold," saying the company's profits may get a boost from the flu season, Medicare drug plans and President Obama's health-care overhaul.

Source: http://news.yahoo.com/stocks-head-lower-pushing-p-500-down-high-173152640--finance.html

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