Stocks closed mostly lower as investors parsed another day of earnings reports, with IBM the latest headline name posting disappointing results.
The Dow lagged noticeably (-0.6%), finishing at its lowest level in two months, as energy shares slid along with crude oil prices and IBM sank 5% after reporting a Y/Y decline in revenue for the 20th consecutive quarter.
"The market hasn't given up any substantial ground, but the leadership - these large-cap names - are being challenged... putting into question some of the valuations in this earnings season," said Daniel Deming, managing director at KKM Financial.
Even so, the S&P closed only 0.2% lower, while the Nasdaq and Russell 2000 eked out modest gains.
U.S. crude oil plunged 3.6% to $50.44/bbl after the EIA reported a smaller than expected weekly draw and gasoline supplies rose for the first time since February, sending the energy sector (-1.4%) to the bottom of the leaderboard by a wide margin; the utilities group finished one spot higher in the standings with a 0.7% loss.
The financial sector (-0.3%) again failed to capitalize on a positive earnings report from one of its top components, as Morgan Stanley beat top and bottom line estimates; last week, the group similarly failed to move higher following solid showings by J.P. Morgan and Citigroup.
But the risk-off tone was mostly contained in equities, as Treasury prices and gold ended in negative territory; the benchmark 10-year yield added 4 bps to settle at 2.21%, while gold closed 0.8% lower at $1,283.40/oz.