STOCKS RETREAT, PULLING INDEXES BELOW RECORD HIGHS

Stocks closed broadly lower on Wall Street Monday, pulling major indexes below the latest record highs they reached last week.

The S&P 500 fell 0.5% and the tech-heavy Nasdaq lost 1%. Small-company stocks did worse than the rest of the market.

Technology stocks had some of the biggest pullbacks, but the losses were shared broadly by a mix of banks, energy companies and others that depend on spending by consumers.

Earnings are front and center this week, as investors look to justify the recent rise in stock prices with the profits needed to keep the market fueled in this recovery. On average analysts are expecting profits across the S&P 500 to be up 24% from a year earlier, according to FactSet.

Eighty-one out of the 500 members of the S&P 500 will report this week, as well as 10 out the 30 members of the Dow, including Johnson & Johnson, Verizon Communications and Intel.

“Investors want to see validation of this very sharp positive economic momentum that is starting to get priced in,” Sunitha Thomas, national portfolio advisor at Northern Trust Wealth Management. “They want to see that earnings momentum is really there for the rest of the year.”

The bond market was relatively stable. The yield on the 10-year Treasury note rose to 1.59% from 1.57% late Friday. Outside of earnings, a good amount of investor attention is focused on the bond market as government stimulus and the recovering economy have led to concerns about inflation.