BAC Bank of America Corporation

By Victor Reklaitis, MarketWatch , Ryan Vlastelica

In focus today: Fed's Fischer, Netflix, Bank of America, Hasbro

U.S. stocks retreated Monday, despite a major bank posting strong results, as investors looked for news that could justify the market's levels, and as crude-oil prices slumped.

Major indexes are coming off two straight weeks of declines, hurt by a rocky start to the third-quarter earnings season, as well as some weak data out of China, which underlined concerns over global growth rates.

The Dow Jones Industrial Average fell 57 points, or 0.3%, to 18,081, with shares of McDonald's Corp.(MCD), off 1.3%, leading losses in afternoon trade. The S&P 500 index slipped 6 points, or 0.2%, to 2,126, topped by a decline in energy shares.

Meanwhile, the Nasdaq Composite Index lost 12 points, or 0.2%, at 5,201.

At current levels, the S&P is down about 2.9% from its record intraday high--reached in August--while it has a price-to-earnings ratio of 28.2, above its historical average.

"Valuations are very high right now, and the earnings season is in trouble; we should have yet another quarter of falling profits," said Mark Grant, managing director at Southwest Securities. "I do not see much prospect for an increase [in stock prices] for the balance of the year."

In a sign of how investors are moving to safety, the S&P utility sector was the strongest performer on the day, up 0.8%. The sector is viewed as a defensive play, offering a higher dividend yield than the broader market.

Meanwhile, oil futures also pressed U.S. equities. Crude -oil prices are often viewed as a gauge of the global economy, and as a result stocks have tended to move in tandem with the commodity. Oil futures (http://www.marketwatch.com/story/oil-prices-slip-after-active-rigs-increase-in-the-us-2016-10-17) fell 1% to $49.80 per barrel, as traders digested data showing an increase in active oil rigs in the U.S.

Read:We'll know soon if the S&P 500 is headed for a 22% wipeout (http://www.marketwatch.com/story/a-22-wipeout-for-the-sp-too-many-parallels-with-the-dot-com-bust-to-ignore-2016-10-17)

(http://www.marketwatch.com/story/a-22-wipeout-for-the-sp-too-many-parallels-with-the-dot-com-bust-to-ignore-2016-10-17)Also read: The stock market is setting itself up for a possibly monster year-end rally (http://www.marketwatch.com/story/the-stock-market-is-setting-itself-up-for-a-possibly-monster-year-end-rally-2016-10-14)

Corporate movers: Bank of America Corp.(BAC) reported both earnings and revenue (http://www.marketwatch.com/story/bank-of-america-profit-buoyed-by-trading-revenue-2016-10-17) that topped expectations, boosted by a rise in trading revenue. The stock was unchanged at $16. Last week, a number of other major financial institutions--including J.P. Morgan Chase & Co. (JPM), Citigroup Inc.(C), and Wells Fargo & Co.(WFC)--also reported (http://www.marketwatch.com/story/us-stocks-on-pace-to-trim-weekly-loss-but-still-finish-week-firmly-in-the-red-2016-10-14) stronger-than-expected results, easing concerns over the financial sector.

Netflix Inc.(NFLX) and IBM(IBM) are on the earnings docket after the closing bell. Nearly 100 S&P 500 companies (http://www.marketwatch.com/story/earnings-hold-the-key-to-the-stock-markets-fate-2016-10-15)--including 11 Dow components--are slated to announce their quarterly earnings in the coming week.

Hasbro Inc.(HAS) shares were the best performers among the S&P 500 index after the toy maker exceeded analysts' forecast for profit and revenue. Its stock was up 7.4% in afternoon trade Monday.

See: What to expect from Netflix earnings (http://www.marketwatch.com/story/what-to-expect-from-netflix-earnings-2016-10-12)

Tesla Motors Inc.'s stock (TSLA) fell 1.9% to $192.72 after CEO Elon Musk tweeted that the maker of electric cars has delayed (http://www.marketwatch.com/story/elon-musk-delays-mysterious-tesla-product-launch-to-allow-time-for-refinement-2016-10-17) Monday's product unveiling to Wednesday. "Needs a few more days of refinement," Musk wrote in his tweet.

Supervalu Inc.(SVU) rose 5.6% to $5.29 following news the supermarket operator plans to sell its Save-A-Lot business (http://www.marketwatch.com/story/supervalu-to-sell-save-a-lot-business-for-1365-billion-in-cash-2016-10-17) for about $1.4 billion.

Other markets: European stocks fell 0.8% while Asian markets closed mixed (http://www.marketwatch.com/story/power-utilities-drain-nikkei-as-asian-markets-dip-2016-10-16). Gold futures and the ICE U.S. Dollar Index (http://www.marketwatch.com/story/dollar-holds-gains-ahead-of-data-fed-speech-2016-10-17) were little-changed.

Economic news: On the Federal Reserve front, Fed Vice Chairman Stanley Fischer said weak productivity and an aging population (http://www.marketwatch.com/story/feds-fischer-says-a-number-of-factors-contributing-to-low-rates-2016-10-17) were among the factors holding back interest rates. While he didn't talk about the outlook for rates in the near term, the Fed is widely expected to raise rates at its December meeting.

In the latest economic data, a gauge of New York-area manufacturing became more pessimistic (http://www.marketwatch.com/story/empire-state-index-falls-further-into-negative-territory-in-october-2016-10-17) in October, while September industrial production rose slightly (http://www.marketwatch.com/story/us-industrial-production-creeps-higher-in-september-2016-10-17).

(END) Dow Jones Newswires

October 17, 2016 13:42 ET (17:42 GMT)

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