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US STOCKS-Wall St down as Kimberly-Clark cuts outlook

Published 04/25/2011, 12:02 PM
Updated 04/25/2011, 12:08 PM
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* Kimberly-Clark, Johnson Controls down after outlooks

* Major European markets closed for Easter weekend

* New home sales up more than expected, prices fall

* Indexes: Dow, S&P down 0.2 pct, Nasdaq up 0.02 pct

* For up-to-the-minute market news see (Updates to midday, changes byline)

By Ryan Vlastelica

NEW YORK, April 25 (Reuters) - U.S. stocks fell on Monday on signs some corporate outlooks were being strained by inflation concerns, including consumer products maker Kimberly-Clark Corp.

The market's decline in a low-volume session followed some strong earnings last week, which helped pushed the Dow to a high for the year. The S&P 500 has moved to the top end of its recent trading range where it is facing resistance.

Of S&P 500 companies that have reported, 75 percent beat analysts' expectations. That is just above the average over the past four quarters but well above the average of 62 percent since 1994, according to Thomson Reuters data.

"Generally numbers have come in much better than expected so far this season, on both the top and bottom line," said Eric Green, senior portfolio manager at Penn Capital Management in Philadelphia.

"But everyone is watching margins because of the energy price situation," he said.

Both Kimberly-Clark and Johnson Controls Inc tumbled after weak forecasts. Kimberly fell 3.5 percent to $63.71 after cutting the low end of its full-year outlook, while Johnson said its third-quarter would be hit by the earthquake in Japan, sending the stock down 3.5 percent to $39.32.

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The Dow Jones industrial average was down 55.97 points, or 0.45 percent, at 12,450.02. The Standard & Poor's 500 Index was down 5.49 points, or 0.41 percent, at 1,331.89. The Nasdaq Composite Index was down 6.34 points, or 0.22 percent, at 2,813.82.

The CBOE VIX volatility index rose 8.7 percent after falling last week to its lowest level since 2007.

Kimberly-Clark is one of the companies most exposed to rising commodity costs because its products contain oil-based materials and paper.

RadioShack Corp fell to $15.64, down 1.2 pct, after the electronics retailer reported a first-quarter profit that fell from the prior year and sales that were below consensus.

For more earnings news, see http://r.reuters.com/dup98r

On the upside, SanDisk Corp rose 3 percent to $50.48 in its first session after raising its 2011 margin outlook late on Thursday.

This week is another hectic one for earnings with 180 S&P 500 companies set to report, including Amazon.com, Coca-Cola Co, Microsoft Corp and Exxon Mobil Corp.

The U.S. Federal Reserve is meeting this week and will hold the first of four press conferences per year on Wednesday. Investors are looking for clues about the direction of monetary policy when the Fed's bond buying program ends in June.

"There are some nerves ahead of that meeting, which could result in some profit taking before then," Green said.

Traders noted that activity would likely be subdued as many major European markets remain closed over the long Easter weekend. About 2.07 billion shares traded on the New York Stock Exchange, the American Stock Exchange and Nasdaq as of midday, below average for this point in the session. (Additional reporting by Edward Krudy; Editing by Kenneth Barry)

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