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By Barbara Kollmeyer, MarketWatch , Ryan Vlastelica

Dow 20,000 seems elusive again

U.S. stocks edged lower Monday, with major indexes retreating from record levels as investors digested comments from Federal Reserve speakers and looked ahead to the start to of the corporate earnings.

Equities have been strong performers of late, with the Dow up nearly 10% over the past three months. Most of those gains were the result of the presidential election in the U.S., with investors betting that the policies Donald Trump is expected to support will accelerate economic growth.

However, the rally has lately shown signs of plateauing. The gains took major indexes to repeated records, and investors are now looking for valuations to be justified by economic data and corporate profits. On Friday, the December nonfarm-payroll report showed solid jobs growth in the month, though the number came in below forecasts.

"We've come a long ways in a hurry, and right now there is more good news than bad news priced into the market. We may be due for a breather with valuations at current levels," said John Brady, managing director at R.J. O'Brien & Associates.

The Dow Jones Industrial Average fell 48 points, or 0.2%, to 19,916, while the S&P 500 index lost 5 points to 2,272, a drop of 0.2%. The Nasdaq Composite Index rose 4 points to 5,529, a gain of about 0.1%.

The Nasdaq was supported by advances in technology stocks, including Apple Inc. (AAPL) and Facebook Inc. (FB), both of which rose 0.8% on the day.

The S&P 500 and the Nasdaq closed at records on Friday, while the Dow ended mere points below its own all-time high. The blue-chip average also came within a hair's breadth of 20,000, a milestone viewed as a key psychological level.

Read:What Dow 20,000 means for stock-market investors (http://www.marketwatch.com/story/what-dow-20000-means-for-stock-market-investors-2016-12-14)

Fed speakers: Boston Fed President Eric Rosengren forecast "somewhat more regular (http://www.marketwatch.com/story/feds-rosengren-sees-somewhat-more-regular-interest-rate-hikes-2017-01-09)" increases in interest rates, citing changes in economic conditions. In December, the Fed indicated it may raise rates by three times in 2017, compared with just once in 2016.

Atlanta Fed President Dennis Lockhart is scheduled to speak in Atlanta at 12:40 p.m. Eastern.

More central bank officials will step up throughout the week, including Fed Chairwoman Janet Yellen, who is set to appear at a town-hall meeting in Washington at 7 p.m. Eastern on Thursday.

A news conference from President-elect Donald Trump is also likely to attract investor attention. His first news conference since July is scheduled for Wednesday (http://www.marketwatch.com/story/donald-trump-announces-jan-11-news-conference-his-first-since-july-2017-01-03).

Need to know:Get ready for a historic 'fiscal shock' as the Dow sets up for another run at 20,000 (http://www.marketwatch.com/story/get-ready-for-an-historic-fiscal-shock-as-the-dow-sets-up-for-another-run-at-20000-2017-01-09)

On the economic docket Monday, a reading on consumer credit for November is due at 3 p.m. Eastern Time, with retail sales and other data to come later in the week.

Stocks to watch: Earnings season kicks off in earnest this week with banks such as J.P. Morgan Chase(JPM) and Bank of America Corp.(BAC) due to report Friday. S&P 500 earnings for the fourth quarter are expected to rise 3% from the year-ago period, and the bulk of that will come from financials, said John Butters, senior earnings analyst at FactSet.

"Banks have certainly had a good run-up, so they may be vulnerable, but I would buy them on any pullback we see," said Brady.

Read:Stock market investors focus on banks as earnings season begins (http://www.marketwatch.com/story/stock-market-investors-focus-on-banks-as-earnings-season-begins-2017-01-07)

(http://www.marketwatch.com/story/stock-market-investors-focus-on-banks-as-earnings-season-begins-2017-01-07)Shares of Merrimack Pharmaceuticals Inc.(MACK) shot up 13% after the company said Sunday it will sell its oncology assets, including its pancreatic cancer drug, to French drugmaker Ipsen SA(IPN.FR) in a deal worth up to $1.025 billion. (http://www.marketwatch.com/story/merrimack-to-sell-off-its-cancer-drugs-slashes-workforce-by-80-2017-01-08)

(http://www.marketwatch.com/story/merrimack-to-sell-off-its-cancer-drugs-slashes-workforce-by-80-2017-01-08)UnitedHealth Group Inc.'s (UNH) Optum health-services arm has agreed to buy Surgical Care Affiliates Inc (http://www.marketwatch.com/story/unitedhealths-optum-to-acquire-surgical-care-affiliates-for-23-billion-2017-01-09-71032011).(SCAI) for about $2.3 billion, which will add a major surgical group to its cluster of doctor groups and clinics. Shares of Surgical jumped 16%.

Shares of McDonald's Corp.(MCD) could be active after news it has signed a deal to sell a controlling stake in its China unit (http://www.marketwatch.com/story/mcdonalds-selling-majority-stake-in-china-business-for-up-to-2-billion-2017-01-08) to an investor group let by one of China's biggest state-owned companies, Citic Ltd.

The car industry may be in focus as Detroit's annual trade show gets under way. Growing tensions between auto makers and President-elect Donald Trump could overshadow the event (http://www.marketwatch.com/story/detroit-auto-show-starts-amid-trump-tensions-2017-01-08).

General Motors Co.(GM) Chief Executive Mary Barra told reporters Sunday that the company won't move small-car production to the U.S. from Mexico (http://www.marketwatch.com/story/ceo-says-gm-not-moving-small-car-production-from-mexico-2017-01-08). Trump has criticized GM for importing some Chevrolet Cruze compact cars from a Mexico plant.

Other markets: The FTSE 100 but it bucked the weakness seen in other European markets . The region was supported by a drop in sterling, which boosted certain U.K. stocks.

The pound was under pressure against the dollar (http://www.marketwatch.com/story/dollar-kicks-off-week-higher-still-juiced-by-jobs-data-2017-01-09) after U.K. Prime Minister Theresa May indicated in an interview that her government plans a definitive break (http://www.marketwatch.com/story/uks-theresa-may-makes-it-clear-we-are-leaving-eu-2017-01-08) with the European Union, raising fears of a "hard Brexit."

Asian markets finished mixed. The Nikkei 225 index was closed for a holiday in Japan.

Oil prices (http://www.marketwatch.com/story/oil-prices-start-the-week-lower-after-jump-in-us-rig-count-2017-01-09) fell (http://www.marketwatch.com/story/oil-prices-start-the-week-lower-after-jump-in-us-rig-count-2017-01-09) after an update from Baker Hughes Inc. (BHI) on Friday showed the number of rigs drilling for oil in the U.S. rose by four in the week ended Dec. 30 to 529. Gold was trading near fresh five-week highs (http://www.marketwatch.com/story/gold-flirts-with-fresh-5-week-highs-as-fed-pacing-is-unclear-2017-01-09).

(END) Dow Jones Newswires

January 09, 2017 09:56 ET (14:56 GMT)

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