* UnitedHealth rises on plans to buy Brazil stake
* Apple falls despite denial of strike at Chinese plant
* TPC Group gets higher buyout offer from Innospec
* Indexes off: Dow 0.25 pct, S&P 0.4 pct, Nasdaq 0.7 pct
By Atossa Araxia Abrahamian
NEW YORK, Oct 8 (Reuters) - U.S. stocks declined slightly in
low volume on Monday, pulling back from recent five-year highs
as investors awaited the start of what many expect will be a
weak earnings season.
Analysts forecast earnings will fall 2.4 percent from the
year-ago quarter, which would mark the first decline in three
years and make it difficult to justify keeping stocks near
The reporting season begins on Tuesday with results from
aluminum company and Dow component Alcoa Inc, which is
expected to post a decline in earnings compared with a year ago.
"We've had a good run, and we're toward the top end of
range," said Scott Wren, senior equity strategist at Wells Fargo
Advisors in St. Louis. "There's very little chance for surprises
in the earnings. We're going to see downward comparisons
The Dow Jones industrial average was down 33.93
points, or 0.25 percent, at 13,576.22. The Standard & Poor's 500
Index was down 6.02 points, or 0.41 percent, at 1,454.91.
The Nasdaq Composite Index was down 22.37 points, or
0.71 percent, at 3,113.82.
With the lack of data and corporate earnings on Monday,
trading is expected to be light due to the Columbus Day holiday.
The U.S. bond market was closed.
Stock strategists and investors say U.S. stock valuations
are broadly out of sync with earnings estimates.
Markets are also apprehensive about the outlook for the
global economy after the World Bank reduced its growth forecasts
for the East Asia and Pacific region and warned the slowdown in
China could worsen and last longer than many analysts expect
Ongoing turmoil in Europe has contributed to weakened China
forecasts. Eurozone officials met on Monday to launch the
region's bailout fund, and at the meeting, regional finance
ministers said that Spain did not need a bailout because it was
taking steps to put its finances in order. [ID: nL6E8L8GVT]
For investors, the long-term outlook for Europe is drawn-out
debt problems, with obstacles still to overcome. "This thing
has years to play out," said Wren. "We're nowhere near the end
of this in any way, shape, or form."
When Alcoa reports, analysts expect a break-even quarter,
down from a profit of 15 cents per share a year earlier,
according to Thomson Reuters data. Alcoa shares rose 0.8 percent
Recent earnings warnings from large multinationals such as
FedEx Corp, Caterpillar Inc and Hewlett-Packard
Co, have cited weakness in Europe and China.
"Certainly there has been a lot of downward revisions in
earnings in general. Some people are predicting that we may see
an overall decline in earnings, so there may be some defensive
posturing and profit-taking," Peter Jankovskis, co-chief
investment officer at OakBrook Investments LLC in Lisle,
According to Thomson Reuters data through Monday, 91
companies in the Standard & Poor's 500 have issued
negative outlooks versus 21 positive preannouncements, for a
ratio of 4.3, the weakest showing since the third quarter of
Apple Inc shares shed 1 percent to $646.19 and was
the biggest drag on both the S&P 500 and Nasdaq 100
indexes after China Labor Watch, a rights advocate group, said
that a Foxconn plant in China that makes Apple's iPhone was
crippled by a strike. Foxconn, a Taiwanese company, denied the
UnitedHealth Group shares gained 0.7 percent to
$57.52 after the health insurer said it would buy a 90 percent
stake in Amil Participacoes SA, Brazil's largest
healthcare company, for about $4.9 billion.
Chemicals maker TPC Group Inc said it received a
buyout proposal from Innospec Inc for $721.3 million,
topping an offer made by private equity firms. TPC shares jumped
4.7 percent to $45.41 while Innospec shed 0.7 percent to $33.69.