* McDonald's pulls Dow lower; Apple helps Nasdaq tread water
* Netflix, Texas Instruments to report after the close
* Healthcare worst performing S&P sector
* Solar companies soar
* Indexes: Dow off 0.1 pct, S&P off 0.1 pct, Nasdaq up 0.1
By Julia Edwards
NEW YORK, Oct 21 The S&P 500 and Dow slipped on
Monday as a clutch of lackluster earnings reports from
McDonald's and others fed concerns that equity valuations were
getting stretched after the S&P index's run to record highs last
Investors also showed a reluctance to make aggressive bets
ahead of Tuesday's release of U.S. payrolls data for September,
which was delayed by the recent government shutdown.
The Dow was lower after McDonald's Corp fell
following a weak fourth-quarter outlook. A rally in Apple Inc
shares after a brokerage ratings upgrade helped the
Nasdaq hold near the unchanged mark.
Though only a small percentage of S&P 500 stocks have
reported earnings thus far, the season has been mixed, with
revenue growth especially a concern. Still, profits have largely
risen and many bellwether companies have topped expectations.
"We are going into earnings season and the market is just
starting to digest the things that have come into play. The
numbers have actually been decent, but you are just getting
started," said Thomas Nyheim, vice president and portfolio
manager at Christiana Trust in Greenville, Delaware.
"That's why there is not that much movement in the market,
With 21 percent of S&P companies having reported, 61.5
percent have topped profit expectations, a rate slightly above
the historical average. But only 52 percent have topped
expectations on revenue, below the historical average of 61
The S&P 500 on Friday capped its biggest weekly gain in
three months on stronger-than-expected earnings from Google
and Morgan Stanley, as well as a deal in
Washington temporarily resolving a political deadlock over the
budget and raising the debt-ceiling. The S&P ended at a record
S&P sectors were mixed, with healthcare stocks making the
biggest decline, down 0.6 percent. Nyheim, who manages
investments in health care stocks, said the sector will be
unpredictable until the effects of President Obama's health care
law play out.
"The push for healthcare is going to be greater as more
people age and come online. We just don't know how it's going to
affect the bottom line," said Nyheim.
The Dow Jones industrial average was down 15.81
points, or 0.10 percent, at 15,383.84. The Standard & Poor's 500
Index was down 1.65 points, or 0.09 percent, at 1,742.85.
The Nasdaq Composite Index was up 1.99 points, or 0.05
percent, at 3,916.27.
Apple boosted the S&P 500 and Nasdaq after Societe Generale
lifted its price target on the stock to $575 from $500 and
advised clients to buy shares. The stock rose 2.5 percent to
$521.83 and was the largest winner on the Nasdaq, adding 7.8
points to the index.
McDonald's fell 0.8 percent to $94.42 after it reported
revenue that missed estimates and warned global October sales
could be relatively flat.
More than 25 percent of the S&P 500 components are due to
report this week, with Texas Instruments and Netflix
among the stocks to report after Monday's market
While Netflix shares have soared this year, few short
sellers are expecting the stock to pull back following its
results, a sign of how the Federal Reserve's stimulus program
has made successful negative bets by short sellers hard to
Hasbro Inc jumped 5.0 percent to a new all-time high
as both earnings and sales topped expectations.
Solar power companies were among the strongest on Monday,
with First Solar Inc up 9.5 percent to $54.76 as the
S&P's top percentage gainer. Trina Solar rose 4.6
percent to $17.32 while SolarCity Corp gained 2.1
percent to $60.60.
JPMorgan Chase & Co reached a tentative $13 billion
deal with the U.S. government to settle investigations into bad
mortgage loans sold to investors by JPMorgan and the banks it
bought during the financial crisis. Shares were down 0.1 pct at