NEW YORK—U.S. stocks fell, building on a four-session series of declines, as worries over rising borrowing costs for European countries kept investors' sentiment in check ahead of the start of earnings season.
The Dow Jones Industrial Average fell 52 points, or 0.4%, to 12876, and the Standard & Poor's 500-stock index declined five points, or 0.3%, to 1377. The Nasdaq Composite rose 7 points, or 0.2%, to 3040.
Industrial and utility stocks led nine of the S&P 500's 10 sectors lower. Only technology stocks traded higher. Alcoa, AA -1.56% set to kick off the first-quarter earnings season when it releases its results after the close, fell. Caterpillar CAT -1.48% and Exxon Mobil XOM -1.32% declined as well.
Aggregate first-quarter earnings for the S&P 500 companies are expected to show the slowest year-over-year growth since the financial crisis.
"We were priced for perfection and it's a lot less than perfect out there," said Uri Landesman, president of Platinum Partners LLP. "If earnings start to be disappointing, it's a perfect storm. And given how quickly the market's risen, it suggests to me that this market will find a base, and that it's going to be lower."
Stocks extended declines after a Commerce Department report showed that stockpiles at U.S. wholesalers increased more than expected in February. The inventories increased by 0.9% from the prior month, economists had forecast a 0.5% increase.
Earlier, the National Federation of Independent Business's index of optimism among small businesses fell to 92.5 in March from 94.3 in February, snapping a six-month streak of increases. Increased inflation pressure was the top concern among small-business owners, with worker compensation costs rising to the highest level since 2008.
Most European markets resumed trading with sharp losses after a four-day weekend. The Stoxx Europe 600 dropped 1.5% to a 10-week low, as investors had the first opportunity to react to discouraging news about U.S. employment released on Friday.
Investors also expressed concern over rising borrowing costs for Spain and Italy, just as signs are mounting that the effects of the European Central Bank's long-term refinancing operations—low-cost three-year loans to banks widely credited with calming bond markets so far in 2012—are wearing off. Yields on 10-year Spanish government bonds climbed to the highest level of the year, while Italian 10-year yields rose to the highest level since February.
Asian bourses were mostly lower. Japan's Nikkei Stock Average slipped 0.1% for a sixth straight loss after the Bank of Japan left unchanged its key interest rate and the size of its asset-purchase program.
China's Shanghai Composite bucked the trend, rising 0.9% after the country swung to a surprise trade surplus in March. Some economists remained concerned that imports rose less than expected.
Crude-oil futures slipped 0.6% to $101.83 a barrel, while gold futures ticked down 0.4% to $1,638.00 a troy ounce. The U.S. dollar rose against the euro and fell versus the yen. The yield on 10-year U.S. Treasury bonds fell to 1.999%, as prices rose.
In corporate news, supermarket operator Supervalu SVU +9.21% jumped after reporting that its quarterly earnings fell less than expected, though revenue declined more than forecast.
Vivus VVUS -0.83% fell after the company said the U.S. Food and Drug Administration extended the review of its weight-loss drug Qnexa by three months.
Akorn AKRX +4.20% rallied: The pharmaceutical company said it launched a generic version of ViroPharma's VPHM -20.20% Vancocin antibiotic.
The U.S.-listed shares of Japan's Sony slid. The entertainment and electronics conglomerate said it widened its outlook for losses this year, citing a strong yen and increased competition.
Harmonic HLIT -3.23% fell after the company cut its first-quarter revenue outlook, and indicated that earnings would miss current projections, citing slower-than-expected order rates earlier in the quarter and a decline in demand from European customers.
