NEW YORK (TheStreet) -- Coming off their best week of the year, U.S. stocks treaded water on Monday as investors look for a clear indication about the direction of corporate earnings.
Stock displayed little energy to start the week, looking ahead to reports from JPMorgan (JPM - Get Report) and Intel (INTC - Get Report) , scheduled for Tuesday, that are likely to offer signals about the strength of the U.S. economic recovery. The S&P 500 was up 0.12%, the Dow Jones Industrial Average added 0.28%, and the Nasdaq gained 0.17%. Benchmark indexes dipped above and below the flat line over the session.
Analysts expect S&P 500 companies to report a 4.8% decline in third-quarter earnings and 3.6% drop in revenue, according to Thomson Reuters. Continued strength in the U.S. dollar and crude oil near 2015 lows are expected to have been the main challenge to growth over the three-month period.
"Absent an unexpected improvement in earnings, or at least more positive guidance for the fourth quarter, the rally in U.S. equities is likely to be contained," Russ Koesterich, managing director and global chief investment strategist at BlackRock, wrote in a note.
Must Read: 5 Big Stocks to Trade for Big Gains
Big banks were closed for the Columbus Day holiday on Monday but they will get their chance to reveal their third-quarter performance this week with many expected to have suffered from challenging trading conditions: JPMorgan will report on Tuesday; Bank of America (BAC - Get Report) and Wells Fargo (WFC - Get Report) are due for Wednesday; and Citigroup (C - Get Report) and Goldman Sachs (GS) are slated for Thursday.
It's a big week for non-financials, too. Johnson & Johnson (JNJ) , eBay (EBAY) and Intel will report on Tuesday; Delta (DAL) and Netflix (NFLX) are due on Wednesday; Mattel (MAT) will report on Thursday; and General Electric (GE) will round out the week on Friday.
Crude oil pulled back from an 11-week high on Monday, closing 5.1% lower at $47.10 a barrel. The energy industry had been on a roll last week after a sharper-than-expected drop in crude inventories and crude oil's brief rally above $50 a barrel inspired hope the sharp drop in commodities had found its bottom. The Energy Select Sector SPDR ETF (XLE) had surged 8% over the past week, but dropped more than 1% on Monday.
In individual stock news, Twitter (TWTR) fell nearly 7% on reports it is set to announce company-wide layoffs this week which will likely affect all departments, according to Re/code. Twitter has around 4,200 employees as of the end of last quarter, more than double the number it had when it floated in 2013.
Eli Lilly (LLY) slumped more than 7% on Monday after the drugmaker reported it is shutting down clinical development of a cholesterol-lowering pill. Hopes were high the drug would be the biopharma's next multi-billion dollar product. Study analysis showed the drug was unlikely to reduce the number of deaths, heart attacks or strokes in patients under treatment.
EMC (EMC) shares were up more than 1% after agreeing to be acquired by Dell for more than $53 billion. However, EMC has up to 60 days to seek bids from other potential suitors, according to the deal terms. If the EMC-Dell deal goes through, it would be the biggest tech hardware industry deal in history.
Fiat Chrysler (FCAU) shares added nearly 2% after the automaker disclosed the initial public offering of Ferrari could value the unit at around $10 billion. Fiat Chrysler will sell nearly 10% of Ferrari in the float at between $48 and $52 a share. Proceeds will be reinvested in Fiat's own turnaround plan.