By Anora Mahmudova and Wallace Witkowski, MarketWatch

Verizon to buy Yahoo in $4.8 billion deal

U.S. stocks retreated from record levels to close lower Monday, as investors turned cautious ahead of a busy week of earnings and central bank meetings.

Stocks pared early losses, but the S&P 500 closed down 6.55 points, or 0.3%, at 2,168.48, with all sectors finishing lower except consumer discretionary, which logged a fractional gain. Earlier, the index had been off by as many as 13 points. A drop in oil prices weighed on sentiment, hitting energy companies once again, with the sector selling off 2%.

The Dow Jones Industrial Average finished down 77.79 points, or 0.4%, at 18,493.06, trimming what had been a 118-point deficit. Chevron Corp.(CVX), Exxon Mobil Corp.(XOM) and UnitedHealth Group Inc.(UNH) led the losses.

Meanwhile the Nasdaq Composite Index shed 2.53 points, or 0.1%, to close at 5,097.63. Earlier in the session, the index had been down nearly 18 points.

Last week's move to all-time highs by the S&P 500 and the Dow "suggests investors are not worried about the impact of the Brexit vote," said Maris Ogg, president at Tower Bridge Advisors, referring to the June 23 U.K. vote to leave European Union that initially shocked financial markets.

Ogg cautioned not to read too much into the levels because trading volumes are generally low.

"People assume not much will happen, as the Federal Reserve is likely to keep rates on hold until after the election," Ogg said.

See:Will investors blame Hillary Clinton if stocks fall this week? (http://www.marketwatch.com/story/will-investors-blame-hillary-clinton-if-stocks-fall-this-week-2016-07-25)

The Federal Reserve kicks off its monetary policy meeting on Tuesday and will announce its decision on Wednesday at 2 p.m. Eastern time. The central bank is widely expected to hold interest rates steady and stop short of signaling a possible rate increase in September because of continued uncertainty about the economic outlook.

Read:What to expect in the Fed statement this week (http://www.marketwatch.com/story/what-to-expect-in-the-fed-statement-next-week-2016-07-22)

Also read:Will the Fed give us our pullback? (http://www.marketwatch.com/story/will-the-fed-give-us-our-pullback-2016-07-25)

The Bank of Japan's rate decision is due on Friday local time and will be closely watched for any hints of more easing in the face of a stronger yen post Brexit and a slowdown in the economy. In total, 15 central banks are scheduled (http://www.marketwatch.com/story/wall-street-braces-for-feeding-frenzy-of-earnings-central-bank-action-2016-07-23) to meet this week.

Some technical analysts pointed out that the rapid advance may find obstacles ahead.

"While the SPX has finally broken out, we can't expect the seemingly unobstructed advance to continue with nary a hiccup. Yes, it has been impressive, and breadth is still undeniably strong. But at some point momentum will slow, and the market must prove it can hold its own, despite operating in a new stratosphere (above 2,135)," wrote Frank Cappelleri, technical analyst at Instinet LLC.

See:Here's why one bull thinks the S&P 500 can rally to 2,400 (http://www.marketwatch.com/story/heres-why-one-bull-thinks-the-sp-500-can-rally-to-2400-2016-07-22)

Earnings: In earnings, however, Monday was a busy day. Sprint Corp.(S) jumped 28% after the telecommunications company reported fiscal first-quarter revenue that beat expectations (http://www.marketwatch.com/story/sprints-stock-rallies-after-revenue-beat-net-phone-customer-additions-2016-07-25).

Shares of Micron Technology Inc.(MU) closed up 6% after adopting a shareholder rights plan late on Friday.

Kimberly-Clark Corp.(KMB) fell 1.5% even as the consumer-products company reported earnings avenue ahead of Wall Street expectations (http://www.marketwatch.com/story/kimberly-clark-reports-better-than-expected-q2-earnings-revenue-2016-07-25).

Movers and shakers:Verizon Communications Inc.(VZ) slipped 0.4% after confirming it has agreed to buy Yahoo Inc. for $4.83 billion (http://www.marketwatch.com/story/verizon-agrees-to-48-billion-deal-to-buy-yahoo-2016-07-24). Shares of Yahoo(YHOO) dropped 2.7% after being halted earlier in the morning news.

Advanced Micro Devices Inc.(AMD) shares continued their rally Monday following last week's earnings, (http://www.marketwatch.com/story/advanced-micro-devices-swings-to-a-profit-2016-07-21-17485351) surging 15%, after nearly doubling over the past three months.

Read:Wall Street braces for feeding frenzy of earnings, central bank meetings (http://www.marketwatch.com/story/wall-street-braces-for-feeding-frenzy-of-earnings-central-bank-action-2016-07-23)

(http://www.marketwatch.com/story/wall-street-braces-for-feeding-frenzy-of-earnings-central-bank-action-2016-07-23)Amazon.com Inc.(AMZN) was off 0.7% after Wedbush Securities lifted the price target on the stock to $835 from $775.

Other markets: Stocks in Asia closed mostly higher (http://www.marketwatch.com/story/hong-kong-stocks-retreat-after-entering-bull-market-territory-2016-07-24), while European markets also advanced for the most part (http://www.marketwatch.com/story/european-stocks-climb-for-first-day-in-three-as-ryanair-ericsson-advance-2016-07-25).

The dollar dropped against most rival currencies (http://www.marketwatch.com/story/dollar-steadies-as-investors-wait-for-fed-bank-of-japan-meetings-2016-07-25), with the ICE Dollar Index down 0.2% at 97.26. Oil futures settled at a three-month low (http://www.marketwatch.com/story/crude-prices-slip-as-market-pessimism-over-supply-persists-2016-07-25) of $43.14 a barrel, while gold settled down 0.3% (http://www.marketwatch.com/story/gold-weakens-as-expectations-for-rate-rise-grow-2016-07-25) at $1,319.50 an ounce as most other metals declined.

--Sara Sjolin in London contributed to this report.

(END) Dow Jones Newswires

July 25, 2016 16:18 ET (20:18 GMT)

Copyright (c) 2016 Dow Jones & Company, Inc.