By Kristina Cooke
NEW YORK (Reuters) - Stocks inched lower on Monday after an unexpected quarterly loss from Wachovia Corp
Goldman Sachs added to the market's negative tone after it said the quarterly earnings season, which is just starting, looks "awful" and that reports still to come will be generally disappoint and drive the S&P 500 lower in coming weeks.
Wachovia said it would cut its dividend, eliminate jobs and raise capital of $7 billion after becoming the latest casualty of the global credit crunch. The No. 4 U.S. bank's stock fell 10 percent, dragging the S&P financial sector index <.GSPF> down 2.1 percent.
But retail sales kept a floor under the market after data showed a modest increase in March, pushed up by a jump in gasoline sales, according to a government report. An S&P index of retailers' shares <.RLX> was up 0.7 percent. Energy companies also helped, giving the biggest boost to the S&P 500 as the price of oil
With earnings season in full swing, investors are taking their trading cues from corporate results. Wall Street analysts expect S&P 500 earnings to show a 13.8 percent decline in quarterly profits compared with an 11.8 percent drop projected one week ago, according to Reuters Estimates.
"We're in the midst of this earnings season, so there is some nervousness about the outlook," said Steve Goldman, market strategist at Weeden & Co in Greenwich, Connecticut.
"And you still have the financial drag. There's Wachovia, which is down 10 percent, and the group still is not showing signs of stabilizing. But oil is helping."
The Dow Jones industrial average <.DJI> was down 2.11 points, or 0.02 percent, at 12,323.31. The Standard & Poor's 500 Index <.SPX> was down 2.03 points, or 0.15 percent, at 1,330.80. The Nasdaq Composite Index <.IXIC> was down 2.93 points, or 0.13 percent, at 2,287.31.
Stocks took a sharp tumble on Friday when economic bellwether General Electric Co
By early afternoon Monday, Wachovia's stock was down 9.9 percent to $25.06 and was the heaviest weight on the S&P.
Three other Dow components in the banking sector also declined, with shares of Bank of America
Among oil companies, shares of Devon Energy
U.S. crude oil futures
Movie rental chain Blockbuster Inc
In other earnings news, building maintenance supply company W.W. Grainger Inc
(Editing by Kenneth Barry)