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TheStreet Open House

Market Preview: Stocks Start Week With Deep Swoon

Stocks in this article: AMAT BA MDT VSEA

NEW YORK ( TheStreet) -- The major equity indexes dug a big hole for themselves on Monday if they're going to break their streak of three straight weeks of declines as renewed eurozone debt worries fueled a deep sell-off.

The Dow Jones Industrial Average posted a triple-digit loss to finish at its lowest level since April 19. The blue-chip index has now fallen in five of the past seven sessions, and its year-to-date gain sits at 7% with May's trading responsible for a 3.4% pullback from 2011 highs in late April.

First-quarter earnings season is enduring a semi-shaky ending. According to data from Thomson Reuters, 68% of the 475 companies in the S&P 500 that had reported their quarterly results as of May 20 beat the average analysts' view. That's above the long-term percentage of 62% since 1994, but below 74% average the market has seen in the past four quarters.

In addition, the aggregate beat sits at 6% for the first quarter, which is again above a long-term average of 2%, but below the 9% pace set in the past year.

Tuesday's calendar features four S&P 500 components led by semiconductor capital equipment giant Applied Materials (AMAT - Get Report). Applied Materials has topped the consensus profit view in four straight quarters and the average estimate of analysts polled by Thomson Reuters is for earnings of 37 cents a share in the company's fiscal second quarter ended in April on revenue of $2.77 billion.

Wall Street has some skepticism about the stock ahead of the report with 13 of the 21 analysts covering the shares at either hold (11) or underperform (2) with the 12-month median price target sitting at $17. The stock is flat since the start of 2011, and has pulled back 19% since hitting a 52-week high of $16.93 on March 3.

Of course, the numbers, which are due after the closing bell, may end up being so much noise as Applied Materials will likely provide more color on its May 4 agreement to acquire Varian Semiconductor (VSEA), a $4.9 billion deal that got decent reviews when it was announced but the shares since seen a decline.

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