Daily Data Flow: U.S. Stocks Decline; Fed Divisions; Nikkei Snaps Winning Streak

U.S. Stocks Decline Ahead of Corporate Earnings Season (Bloomberg)
U.S. stocks fell, after the Standard & Poor’s 500 Index climbed to a five-year high, as investors awaited the start of the corporate earnings season tomorrow. The S&P 500 fell 0.4% to 1,461.23 at 3:16 p.m. New York time. The Dow Jones Industrial Average lost 47.33 points, or 0.4%, to 13,387.88. Trading in S&P 500 companies was 2% above the 30-day average at this time of day. “We’ve come a long way in a very short time,” Tom Wirth, senior investment officer for Chemung Canal Trust Co., in Elmira, New York, said. “I’m expecting better-than-anticipated earnings. Yet we need to see some consolidation first.”

Divisions at the Fed Have Markets Puzzled (CNBC)
At least two separate fault lines have developed at the Federal Reserve over how much quantitative easing to do this year. One debate—which is the least controversial—is how quickly the unemployment rate will start to improve, which would allow the central bank to start pulling back from its bond purchases and even begin reversing its longstanding zero interest-rate policy. But the other, more divisive issue is over the huge growth in the Fed’s balance sheet from the bond purchases. This year alone, the Fed could expand its balance sheet by more than $1 trillion. That’s got some members worried that the Fed may need to pull back even before it even reaches its economic targets.

Nikkei Drops, Snaps 5-day Winning Streak (Reuters)
Japan’s benchmark Nikkei average fell on Monday, snapping a five-session winning streak as a pause in the yen’s weakness triggered profit-taking on exporters, while utility shares lost ground on brokerage downgrades. The Nikkei dropped 0.8 percent to 10,599.01. The dollar last traded at 87.85 yen, inching away from Friday’s session high of 88.48 yen, the greenback’s highest level against the Japanese currency since July 2010. A stronger yen cuts exporters’ overseas earnings when repatriated. “There is strong caution against the steep rises in the market in a short period of time,” said Kenichi Hirano, a strategist at Tachibana Securities.