Stocks set to slide to kick off week

[July 12, 2010]  NEW YORK (AP) -- Stocks were set to slide Monday as traders approach earnings season cautiously and book some profits after the best week of trading in a year. Stock futures fell.

The Dow Jones industrial average jumped 5.3 percent last week and broader indexes posted even larger gains, their biggest since last July. The moves come ahead of earnings season, which kicks off with aluminum producer Alcoa Inc. releasing results after the market closes Monday.

Until last week, stocks had been sliding on signs that the economy is not growing nearly as fast as economists and investors had hoped. Earnings over the next few weeks will provide insight into whether sluggish retail sales, waning consumer confidence and high unemployment have actually hurt businesses' profits.

Investors will also want to see how optimistic executives are when providing outlooks for their companies going forward. Increased optimism would likely give the market a boost and could be a sign that job creation will speed in the coming months.

U.S. futures were not able to get a lift Monday from some gains overseas. Most Asian and European markets rose after China said exports jumped 35 percent in June. The report on exports is especially uplifting because of concerns that the global economy is slowing down.

Ahead of the opening bell, Dow Jones industrial average futures fell 35, or 0.4 percent, to 10,097. Standard & Poor's 500 index futures fell 4.70, or 0.4 percent, to 1,067.80, while Nasdaq 100 index futures fell 7.25, or 0.4 percent, to 1,804.25.

Despite the biggest weekly gains in a year, some investors are still unsure about a rebound in stocks. Trading volume was light, meaning many investors weren't confident the gains would hold and avoided making any moves.

And even with the surge, the Dow is still down 9 percent from its high of the year reached in late April.

This week should provide some clear direction about the health of the economy. Aside from earnings reports, traders will also get economic readings on retail sales, weekly jobless claims, manufacturing activity, consumer sentiment and inflation. The economic reports come during the second half of the week at the same time the pace of earnings reports picks up.

Meanwhile, bond prices rose Monday. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 3.02 percent from 3.06 percent late Friday.

Overseas, Britain's FTSE 100 rose 0.7 percent, Germany's DAX index gained 0.1 percent, and France's CAC-40 rose less than 0.1 percent. Japan's Nikkei stock average dipped 0.4 percent after the ruling party lost elections Sunday.

[Associated Press; By STEPHEN BERNARD]

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