By Anora Mahmudova and Barbara Kollmeyer, MarketWatch

Apple Inc. first-quarter earnings in focus

U.S. stocks drifted into negative territory on Monday, with the S&P 500 and Nasdaq Composite retreating from records set on Friday ahead of the closely watched Federal Reserve meeting later this week.

The S&P 500 (SPX) was down 4 points, or down 0.2%, at 2,115.39. The Nasdaq Composite (RIXF) was down 22 points, or 0.4%, to 5,069. The Dow Jones Industrial Average (DJI) was also moving south and was trading flat at 18.077 in afternoon trade.

Kate Warne, investment strategist at Edward Jones, said investors are relieved that earnings aren't as bad as feared. But she noted that the market is cautious ahead of the Fed meeting this week.

"The stock market performance this earnings season is all about numbers beating lowered expectations. There is also less worry about Greece, while a combination of better economic news and ECB's quantitative easing are underpinning prices," Warne said.

Investors remain optimistic about results from the largest company in the world, in terms of market capitalization, Apple Inc. (AAPL) , which is expected to report after the opening bell. Shares in the tech juggernaut rallied 2%.

Need to know: Apple's report poised to rip through this vulnerable market (http://www.marketwatch.com/story/apples-report-poised-to-ripple-through-this-vulnerable-market-2015-04-27)

"Judging by the moves in the tech giant last week, the market believes the eight consecutive quarterly earnings beats will continue. Expect a sizable increase to its previously announced buyback," said Chris Weston, chief market strategist at IG, in a note.

Strategist: Here's why tech stocks deserve to be loved (http://www.marketwatch.com/story/strategist-heres-why-tech-stocks-deserve-to-be-loved-2015-04-24)

Analysts expect Apple to report fiscal second-quarter earnings of $2.15 a share and revenue of $55.75 billion. Analysts have grown increasingly bullish on Apple, with momentum building surrounding its Apple Watch and better-than-expected sales of its iPhone 6 models. Read: What to watch for in Apple's earnings (http://www.marketwatch.com/story/what-to-watch-for-in-apples-earnings-2015-04-23)

(http://www.marketwatch.com/story/what-to-watch-for-in-apples-earnings-2015-04-23)Also read: Apple, energy, health care earnings to dominate week (http://www.marketwatch.com/story/apple-energy-health-care-earnings-to-dominate-week-2015-04-26)

(http://www.marketwatch.com/story/what-to-watch-for-in-apples-earnings-2015-04-23)A Fed meeting and data: The economic calendar heats up midweek, with a preliminary reading on first-quarter gross domestic product due on Wednesday. Also on Wednesday, Federal Reserve policy makers will deliver an updated policy statement after the conclusion of the central bank's two-day meeting.

Signe Roed-Frederiksen, senior analyst at Danske Bank, said one thing that could come from the Federal Reserve is an emphasis that a soft patch in U.S. growth has been caused by temporary factors.

"Market participants have adjusted their expectations of a first fed funds rate hike from October December/January, and we believe that the statement could reverse some of this move," said Roed-Frederiksen. The analyst added that this week's data "should also work in the direction of an upward shift in the expected path for the fed funds rate."

Read: Will the economy roar back after a rocky start to the year? (http://www.marketwatch.com/story/will-economy-roar-back-after-rocky-start-to-the-year-2015-04-26)

Stocks to watch: Shares of Applied Materials Inc.(AMAT) dropped more than 7% after the company decided to abandon its merger plan with Tokyo Electron Ltd., citing problems with the U.S. Department of Justice.

Shares of iGATE Corp.(IGTE) rose 3.5% after French computer services and tech group Capgemini said it would buy its U.S. peer for $4 billion (http://www.marketwatch.com/story/capgemini-buys-igate-for-4-billion-2015-04-27-2485842).

Shares of Marvell Technology Group Ltd.(MRVL) were off 2% after the company warned Friday that revenue will be weaker than expected (http://www.marketwatch.com/story/marvell-technology-warns-revenue-will-be-weaker-2015-04-24).

U.S.-listed shares of Deutsche Bank AG(DB) were down 4% after Germany's biggest bank reported over the weekend that its profit halved on litigation costs (http://www.marketwatch.com/story/deutsche-bank-profit-halves-on-litigation-costs-2015-04-27) and said Monday it will scale back its investment banking (http://www.marketwatch.com/story/deutsche-bank-to-trim-its-investment-banking-2015-04-27).

Shares of Celladon Corp.(CLDN) slid 79% to $2.92 after the biotech company said over the weekend that a trial of its heart failure treatment missed its primary and secondary endpoints. Shares are set to open at the lowest level since the company went public in January 2014.

Other markets: Deutsche Bank did its part to keep European stocks (http://www.marketwatch.com/storyno-meta-for-guid) from rising much, with those markets also pressed by continuing debt troubles out of Greece.

Read: Some Europe ministers suggest 'Plan B' if Greece talks fail (http://www.marketwatch.com/story/some-europe-ministers-suggest-plan-b-if-greece-talks-fail-2015-04-27)

(http://www.marketwatch.com/story/some-europe-ministers-suggest-plan-b-if-greece-talks-fail-2015-04-27)The Hong Kong Hang Seng Index and Shanghai Composite Index stocks both rallied on Monday, hitting new seven-year highs separately, led by oil and shipping stocks that surged on reports about possible mergers between several of China's largest state-owned firms.

(http://www.marketwatch.com/story/some-europe-ministers-suggest-plan-b-if-greece-talks-fail-2015-04-27)Oil prices (http://www.marketwatch.com/story/oil-futures-edge-lower-as-dollar-creeps-higher-2015-04-27)(CLM5) eased, and gold (GCM5) edged higher, while the dollar (DXY) traded higher against most of its G-10 rivals.

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