* Investors looking ahead to bellwether company earnings
* Merck up after FDA review, strategic options plans
* Lululemon, Sodastream, Express fall after outlooks
* Indexes down: Dow 0.4 pct, S&P 0.4 pct, Nasdaq 0.3 pct
By Ryan Vlastelica
NEW YORK, Jan 13 U.S. stocks fell on Monday as
investors awaited an onslaught of corporate results to gauge how
companies are faring amid mixed signs on economic growth.
While some early reads on the season have been positive,
market participants are looking for further justification that
stocks are fairly valued with indexes near all-time highs.
Following a jump of almost 30 percent last year, the S&P
500's forward price-to-earnings ratio is the highest in nearly
seven years. While fourth-quarter earnings are seen rising 7.3
percent, according to Thomson Reuters data, the 9.8 ratio of
negative to positive guidance is at a record.
"People are sitting on their hands, waiting for major
results to figure out how strong this season may be," said
Douglas DePietro, managing director at Evercore Partners in New
DePietro was looking forward to results from JPMorgan Chase
& Co and Wells Fargo & Co, both slated to report
on Tuesday. General Electric Co, Goldman Sachs and
Intel Corp are also reporting this week.
Equity gains have largely come on accommodative monetary
policies by the Federal Reserve, although not all economic
indicators enjoyed a similar boost. The December payroll report,
released on Friday, came in much lower than expected.
The Dow Jones industrial average was down 67.72
points, or 0.41 percent, at 16,369.33. The Standard & Poor's 500
Index was down 7.55 points, or 0.41 percent, at 1,834.82.
The Nasdaq Composite Index was down 12.93 points, or
0.31 percent, at 4,161.74.
Losses were limited in the Dow and S&P by Merck & Co
, which rose 2.9 percent to $51.33, after a preliminary
U.S. Food and Drug Administration review said the company's
experimental blood clot-preventing drug vorapaxar should be
The drugmaker also said it is pursuing strategic options for
its animal health and consumer businesses and expects to
complete any action it takes this year.
Equities have started 2014 on a lackluster note, dipping 0.7
percent year-to-date as market participants tried to gauge how
quickly the Fed will wind down its stimulus.
In merger news, Beam Inc agreed to be acquired by
Suntory Holdings Ltd for $16 billion, including debt, while
British engineering firm Amec provisionally agreed to
buy Foster Wheeler in a cash and share deal that values
the company at $3.13 billion. Shares of Beam jumped 24 percent
to $83.16 while Foster Wheeler rose 1.3 percent to
"Merger and acquisition activity continues to be an
underlying bullish sentiment for the market," said DePietro.
"It's one of the most positive things reflecting on the market."
On the downside, Scripps Networks Interactive Inc
fell 5.4 percent to $77.61 after the Wall Street Journal
reported that the company had abandoned talks for a merger with
Discovery Communications Inc last week. Discovery fell
1.7 percent to $82.62.
Lululemon Athletica Inc, Express Inc and
Sodastream International all fell after giving weak
fourth-quarter outlooks. Lululemon sank 16 percent to $50.21
while Express slid 2.6 percent to $18.2 and Sodastream plunged
22 percent to $38.80.
But Wendy's outlook was a bright spot, sending
shares up 8.3 percent to $9.14 after the fast-food restaurant
chain estimated adjusted quarterly earnings above analysts'
expectations, as expenses fell due to franchising many