Wall Street flat as caution prevails before earnings

U.S. stocks were little changed on Tuesday after a recent rally as investors waited for the start of the U.S. earnings season, which may give direction to the range-bound market.

Repeated warnings about the economy have left investors cautious before what could be a disappointing earnings season, after a rally that has pushed the S&P 500 up nearly 16% so far in 2012, driving it to an almost five-year high.

In the past few days, however, the market has been range-bound as investors wait to see if there are any earnings surprises and what companies' expectactions are for the fourth quarter.

"We are about earnings here for the next two or three weeks, so I would expect to see us just chopping around in here," said Frank Lesh, a futures analyst and broker at FuturePath Trading LLC in Chicago. "They seem to be ratcheting down expectations for earnings somewhat, but you are still at 1,450," he said of the S&P 500 level.

"It either confirms your worst fears or things come in a little better than expected. At this point you don't really know, you just have to wait for the news."

The markets had a muted reaction to the International Monetary Fund's lowering of its forecast for global growth. The IMF cut its forecast for 2012 to 3.3% from 3.5% and forecast growth for next year at 3.6%.

Analysts forecast third-quarter earnings of S&P 500 companies would fall 2.3% from the year-ago quarter, according to Thomson Reuters data, which would be the first drop in U.S. quarterly earnings in three years.

Earnings season will get under way later on Tuesday when Dow component Alcoa Inc reports quarterly earnings after the market close. Analysts expect Alcoa's third-quarter results to show the aluminum company broke even, down from a profit of 15 cents per share a year earlier, according to Thomson Reuters data.

Shares of Alcoa rose 1% to $9.22.

Among large multinationals that have warned about earnings, citing weakness in Europe and China, are FedEx Corp , Caterpillar Inc and Hewlett-Packard Co .

The Dow Jones industrial average dropped 8.51 points, or 0.06%, to 13,575.14. The Standard & Poor's 500 Index shed 0.93 points, or 0.06%, to 1,454.95. The Nasdaq Composite Index lost 9.85 points, or 0.32%, to 3,102.50.

Nasdaq OMX said it has halted trading in the Russell 2000 index as the index was not being disseminated by Nasdaq OMX. The exchange said it was investigating an inbound data glitch affecting some Russell indexes.

According to data through Tuesday, 94 companies in the S&P 500 have issued negative outlooks versus 22 positive pre-announcements, for a ratio of 4.3, the weakest showing since the third quarter of 2001.

Edwards Lifesciences Corp cut its revenue forecast for the third quarter, as sales of the medical device maker's heart valve that was expected to drive results fell short of estimates. Shares plunged 17.1% to $89.06 in premarket trade.

Spectrum Brands Holdings Inc , the maker of Rayovac batteries and other consumer products, said it will buy a unit of Stanley Black & Decker Inc that makes door locks and bath fixtures for $1.4 billion. Spectrum Brands shares gained 9.9% to $45.25 in premarket.

Intel Corp was the biggest drag on the Nasdaq 100 index index after Sanford Bernstein cut the chipmaker to an "underperform" rating. The PHLX semiconductor index <.SOX> lost 0.6%.