By Ben St. Clair and Allison Prang 
   -- U.S. stocks mixed 
 
   -- Oil prices fall on supply concerns 
 
   -- Banks report strong earnings 

The S&P 500 inched slightly lower Monday as shares of energy companies fell alongside a decline in oil prices and as investors looked ahead to a busy week of corporate earnings results.

The broad stock-market index fell 2.88 points, or 0.1%, to 2798.43, while the technology-heavy Nasdaq Composite dropped 20.26 points, or 0.3%, to 7805.72. Both indexes snapped two-day winning streaks. The Dow Jones Industrial Average ticked up 44.95 points, or 0.2%, to 25064.36.

Energy stocks were by far the weakest of the S&P 500's 11 sectors, falling 1.2%, on lower oil prices. U.S. crude settled down 4.2% at $68.06 amid concerns that Russia would increase output beyond what it agreed to last month.

Investors appear so far to have largely shrugged off trade concerns, and U.S. stocks have been lifted by strong U.S. economic data and positive earnings expectations in recent sessions. In the S&P 500, 60 companies are on tap to report quarterly results this week.

Before the market opened, Bank of America -- the second-largest U.S. bank by assets -- posted second-quarter earnings that beat expectations, sending shares up $1.23, or 4.3%, to $29.78.

The results helped buoy financial stocks, which were the best performers in the S&P 500 on Monday, up 1.8%. The KBW Bank index climbed 2.1%.

BlackRock also reported higher-than-expected earnings, but its shares fell 3.13, or 0.6%, to 503.96 as the money manager pulled in significantly less investor cash than a year earlier. Goldman Sachs and Morgan Stanley are slated to report Tuesday and Wednesday mornings, respectively.

Shares of Netflix, which reported its latest results after the market closed, fell 13% in after-hours trading after the company missed its new subscriber estimates by more than one million, which the company attributed to faulty internal guidance.

Aaron Clark, portfolio manager for GW&K Investment Management, said earnings growth is either peaking or has already peaked and that strong results are largely priced into stocks. The latest reports alone won't push the market to new highs, he said.

Although he tends to look at specific stocks as opposed to sectors, Mr. Clark said he is looking at utilities, which are appealing because they have underperformed this year. That sector, along with real estate, is a more defensive play for investors because of its steady dividend payments.

Phil Orlando, chief equity strategist for Federated Investors, said the more prominent story around earnings will likely be "soft" guidance from companies as a result of issues like trade and the yield curve narrowing, among other things.

"Managements by and large have no reason to go out on a limb here," he said. Mr. Orlando said his firm slightly reduced its exposure to stocks a couple of weeks ago because it wanted to collect its profits before a potentially bumpy summer.

Still, expectations for strong earnings have largely helped overshadow trade tensions. The Dow industrials have gone up all but one day since the U.S. and China began imposing tariffs on $34 billion of each other's goods on July 6.

"It is hard to pin something truly tangible to" recent stock market gains since many explanations have been true for months, said Simon Derrick, chief currency strategist at BNY Mellon. "You can try to create a narrative around it, but it hasn't always worked out."

Meanwhile, Asian stocks have been hit harder by the trade disputes, with major indexes down so far this year. Shanghai stocks have shed nearly 15%, and economists estimate trade conflicts could cut 0.2 to 0.5 percentage point off China's gross domestic product in the coming year.

On Monday, GDP data revealed a slowing Chinese economy in the second quarter, weighed down by government initiatives to rein in risky borrowing and lending. The 6.7% remains above the government's 6.5% target, but key statistics pointed to a slowing economy.

The Shanghai Composite Index fell 0.6% Monday, following its largest one-week percentage gain since June 2016.

In Europe, the Stoxx Europe 600 fell 0.3%. Banks outperformed in Europe as shares in Deutsche Bank added 7.3% after the bank's preliminary second-quarter results beat expectations.

Write to Allison Prang at allison.prang@wsj.com

 

(END) Dow Jones Newswires

July 16, 2018 17:20 ET (21:20 GMT)

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