Stocks are falling this morning as the S&P 500 consolidates near long-term highs and investors brace for a negative earnings season.
S&P 500 futures are lower by about 0.4 percent. That's less than the losses of about 1 percent in Europe, where finance ministers are meeting to discuss Spain's debt problems. Asian markets declined by a smaller amount in the overnight session after U.S. stocks failed to hold early gains on Friday. Commodities are also lower.
With the S&P 500 has been consolidating above the key 1440 level, investors are preparing for companies to report lower quarterly profits for the first time since 2009. The results begin tomorrow afternoon with Alcoa, which is expected to earn just $0.01, compared with $0.22 a year earlier. The main culprit is slower growth in the wake of the European debt crisis.
One bright spot, however, is in the financial sector as analysts expect banks to report improving results, according to Bloomberg. Although no major U.S. economic reports are scheduled today, overseas news is mixed this morning.
The World Bank reduced its economic-growth forecast for East Asia and the Pacific region, and Germany reported lowered industrial production for August. China, on the other hand, saw its services sector accelerate in September, according to HSBC's monthly survey.
Foreign-exchange and commodities markets are signaling caution this morning. Oil fell by more than 1 percent, while silver and copper dropped almost 2 percent. Gold is off half a percent, and most agricultural foodstuffs are negative.
The euro is down half a percent against the U.S. dollar, while the yen is higher across the board--typical when traders are averse to risk. The Australian dollar is bucking the trend by climbing against the greenback.
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