NEW YORK (AP) — Stocks were mixed on Wall Street, with the Standard & Poor's 500 sliding further below a five-year high it reached last week. Apple dropped on concern that demand for the iPhone 5 is waning.
The Dow Jones industrial average rose seven points to 13,495 as of 1:52 p.m. Monday, having fallen as much as 29 points at the start of the day. The S&P 500 fell three points to 1,469. The Nasdaq composite index fell 15 points to 3,110.
The Standard and Poor's 500 closed at a five-year high of 1,472 on Thursday, following a solid start to the fourth-quarter earnings reporting period and amid optimism that the outlook for global growth is brightening.
Apple's stock, which isn't included in the Dow but accounts for 10.3 percent of the Nasdaq index, slid $17.9 to $502.30 after The Wall Street Journal reported that the company has cut its orders for iPhone 5 components due to weak demand. Apple slipped below $500 a share for the first time in nearly a year in early trading. The stock has slumped 28 percent since closing at a record $702.10 in September.
Earnings reporting will pick up this week with many big U.S. banks, including JPMorgan Chase, Citigroup and Bank of America releasing results.
"The market is definitely in wait and see mode," said Brian Gendreau, a market strategist at Cetera Financial Group.
Investors will be scrutinizing revenues, to assess whether the drawn-out debate over the "fiscal cliff" had an impact on consumer spending. A series of tax hikes and spending cuts due to come into effect Jan. 1 were only averted by a last-minute deal.
Earnings growth has likely peaked for now because companies have been relying on cost cutting, rather than growth, to boost profitability, says Ron Sloan, one of several chief investment officers at Invesco. Analysts currently forecast that fourth-quarter 2012 earnings for S&P 500 companies will increase 3.3 percent, according to S&P Capital IQ. That compares with 8.35 percent from the same period a year earlier.
"We have to make this transition....from depending on margins and cost cutting, to an old-fashioned, animal spirits, industrial recovery where companies are willing to spend money to hire people," said Invesco's Sloan.
Federal Reserve Bank of Chicago President Charles Evans, an alternate member of the Fed's Open Market Committee, said Monday in a speech in Hong Kong that central banks should help create conditions to foster "robust demand growth," as the U.S. and other advanced economies try to reduce debt.
President Barack Obama is currently urging Congress to increase the nation's borrowing limit so it can continue paying its bills. The government has hit its $16.4 trillion limit and is expected to run out of ways to meet all of its obligations around March 1, perhaps earlier. Republicans wants spending cuts in exchange for raising the debt ceiling.
Failure to lift the borrowing limit would be "a self-inflicted wound" to the economy, Obama told a White House news conference on Monday.
The yield on the 10-year Treasury note, which moves inversely to its price, was little changed at 1.86 percent.
Among other stocks making big moves:
— H.H. Gregg, a home appliances retailer, fell 72 cents to $7.17 after the company lowered its earnings forecast for fiscal 2013, citing declining demand for flat screen televisions.
— Harry Winston Diamond Corp. gained 49 cents to $14.76 after the company agreed to sell its namesake retail jewelry and watch division to Switzerland's Swatch Group in a deal valued at $1 billion.
— Sprint Nextel fell 19 cents to $5.73 after JPMorgan cuts its rating on the stock to "neutral" to "overweight." Analysts at the bank expect the company to spend big on capital investment this year and say that the outlook for subscriber growth in uncertain.