MARKET SNAPSHOT: U.S. Stocks Retreat From Record Levels

By Carla Mozee and Anora Mahmudova, MarketWatch

NEW YORK (MarketWatch) -- The U.S. stock market edged lower on Monday, with the main benchmarks retreating from record levels reached Thursday, as investors gear up for the second-quarter earnings season.

The S&P 500 (SPX) was 6 points, or 0.3% lower at 1,979.12, with the defensive sectors, such as utilities and telecoms trading higher.

The Dow Jones Industrial Average (DJI) fell 57 points, or 0.3%, to 17,012.04. The Nasdaq Composite (RIXF), the only one of the three that didn't close at a record on Thursday, was down 14 points, or 0.3%, to 4,471.37.

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Investors are easing back from their three-day July 4th weekend without confronting major economic data or assessing speeches from Federal Reserve members. The market did see fireworks Thursday after the June U.S. jobs report outstripped expectations.

The new earnings season begins Tuesday with results from aluminum producer Alcoa Inc. (AA), with another highlight coming from Wells Fargo & Co. (WFC) on Friday.

Earnings for the S&P 500 are expected to rise by 4.9% for the quarter, according to FactSet, and with stock prices extending their reach to new highs, investors are likely to be less forgiving if companies miss Wall Street's expectations. Analysts have reduced their earnings estimates by the lowest amount since the second quarter of 2011, said John Butters, senior earnings analyst at FactSet.

Among individual companies, American Apparel Inc. (APP) jumped after The Wall Street Journal reported the retailer is in talks to raise new financing following the ouster of CEO Dov Charney.

NQ Mobile Inc.(NQ) shares continued to slide following news last week that the chairman of the company's audit committee had stepped down.

King Digital Entertainment (KING) shares climbed solidly above their $22.50 IPO price, after briefly doing so last week for the first time since the March IPO flop. For more stock movers, read Movers and Shakers column.

In the commodities market, crude for August delivery (CLQ4) fell 29 cents to $103.77 a barrel, and gold futures(GCQ4) fell more than $5 an ounce to $1,314. an ounce.

Asian stocks closed mostly lower, with Japan's Nikkei Average down 0.4%, and European stocks fell after an unexpected and steep drop in German industrial production raises worries about growth.

The dollar (DXY) extended gains into a fourth consecutive day, with traders considering whether the U.S. jobs report for June adds more pressure on the Fed to raise interest rates sooner than later.

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