Stock Market Today: Stocks Dip From Record Highs on Eve of Earnings Season

NEW YORK (TheStreet) -- U.S. stock indices were dipping Monday following the long July 4 weekend and a record performance that saw the Dow Jones Industrial Average close well over the 17,000 threshold.

The Dow fell below the psychologically important milestone set on Thursday, slipping 0.42% to 16,995.92. The S&P 500 was off 0.48% to 1,975.82. The Nasdaq was down 0.75% to 4,452.17. 

The next set of catalysts for stocks will be second-quarter earnings season, beginning on Tuesday with Alcoa's (AA) results after the closing bell and earnings reports from Family Dollar Stores (FDO) on Thursday and U.S. mortgage lender Wells Fargo (WFC) on Friday.

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Analysts forecast second-quarter per-share earnings for companies in the S&P 500 will record a substantial gain from the first quarter. As of July 3, S&P Capital IQ consensus estimates now point to a second-quarter 2014 EPS increase of 6.6%, nearly twice the 3.4% year-over-year gain reported for the first quarter. Seven of the 10 sectors in the S&P 500 are forecast to show second-quarter growth rates that exceed first-quarter gains, with the biggest sequential increases coming from the energy and materials sectors.

"Expectations were for negative growth year over year for the first quarter and we pulled one out with 2.1% growth. That's a testament to companies' ability to do business even in a horrible economic backdrop," Voya Investment Management senior market strategist Karyn Cavanaugh told TheStreet. "A lot of companies ratcheted down their expectations because of that bad GDP outlook for the first quarter ... but I think we'll end up doing better than we expected."

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