Stocks declined Monday, sending the Standard & Poor's 500 index down for a second session, amid concern Europe's debt crisis is deepening and after a Chinese central-bank adviser said the nation's economic growth may slow further.
The Dow Jones industrial average fell 101.11 points, or 0.8%, to 12,721.46. The S&P 500 fell 12.14 points, or 0.9%, to 1350.52, paring an earlier loss of 1.8%. The Nasdaq composite slid 35.15 points, or 1.2%, to 2890.15.
"Investors are on edge," says Russ Koesterich, global chief investment strategist for the IShares unit of investment house BlackRock. "Chinese growth has slowed. It's not clear that the existing firewalls in Europe are large enough. We knew the Spanish regional governments had debt. The question is: How bad is it?"
U.S. stocks fell from the open as Spain's 10-year bond yields rose to a euro-era high on bets more of its regions will seek aid. Greece's creditors meet this week, while German Vice Chancellor Philipp Roesler said he's "very skeptical" European leaders will be able to rescue Greece. Chinese central bank adviser Song Guoqing said the nation's growth may cool to 7.4% this quarter.
Concern about a global slowdown has led investors to a more defensive stance since the S&P 500's 2012 high in April. Phone, utility, consumer staple and health care companies were the only ones to gain among 10 groups during that period -- a time during which financial shares have slumped 11%.
Investors are also watching corporate results. Better-than-forecast earnings are masking weaker sales growth in the most recent quarter as U.S. companies improve margins to top estimates.
Sales rose an average 3% in the second quarter among 123 members of the S&P 500 that have reported results so far, according to data compiled by Bloomberg. Only 41% of the reported companies have topped analysts' estimates on sales, while 73% have beaten on profit, the data show.
The gap in results signals that companies may hold off hiring and expanding until demand rebounds globally. Federal Reserve Chairman Ben Bernanke last week told lawmakers that progress in reducing unemployment may remain "frustratingly slow," with joblessness stuck above 8% since February 2009.
Analysts have lowered predictions for profit and revenue in recent months. For earnings, they estimate a 1.6% decline on average among all S&P 500 members after anticipating a 0.5% increase in May. Revenue may rise 1.8% on average, down from a 3.7% estimate in May.
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