Wall Street opens lower as earnings continue to underwhelm

By Tanya Agrawal

REUTERS - U.S. stocks opened lower on Monday as corporate earnings continued to underwhelm and investors stayed away from risky assets a day before the start of the Federal Reserve's two-day policy meeting.

The central bank's policymakers are expected to hold interest rates steady when they meet on Tuesday and Wednesday, but may tweak their description of the economic outlook to reflect more benign conditions that leave the path open for future rate rises.

Traders are also keeping an eye on the outcome of a Bank of Japan meeting on Thursday, with expectations that Japan could push deeper into negative interest rate territory.

"We are looking at a mixed to lower session today as investors assess events that could cause some gyrations," said Peter Cardillo, chief market economist at First Standard Financial in New York.

"Investors have a lot to digest this week with the Fed meeting, oil prices and earnings, which could lead to higher market volatility and uncertainties," Cardillo said.

The stock market is on one of its longest bull runs, with the S&P 500 about 2 percent away from its all-time high.

At 9:45 a.m. ET (1345 GMT) the Dow Jones industrial average was down 73.79 points, or 0.41 percent, at 17,929.96, the S&P 500 was down 6.78 points, or 0.32 percent, at 2,084.8 and the Nasdaq Composite was down 5.66 points, or 0.12 percent, at 4,900.57.

All the 10 major S&P sectors were lower, with the energy index's 0.51 percent fall leading the decliners.

Perrigo slumped 10 percent to $109.37, making it the biggest drag on the S&P, after the company's CEO decided to join rival drugmaker Valeant. Valeant's U.S.-listed shares were up 3.7 percent at $37.30.

Investors have been assessing first-quarter earnings, which are expected to decline 7.1 percent. Of the 132 S&P companies that have reported so far, 58 percent of companies have reported revenue above analyst expectations, falling short of the longterm average of 60 percent, according to Thomson Reuters estimates.

The Commerce Department is expected to report that new home sales increased 1 percent to an annualized rate of 520,000 units in March, according to a Reuters survey of economists. The data is expected at 10 a.m. ET (1400 GMT).

Shares of Tribune Publishing soared 57 percent to $11.80 after Gannett offered to buy the owner of the Los Angeles Times. Gannett was little changed at $15.78.

Xerox fell 9.1 percent to $10.16 after the printer and copier maker reported a fall in quarterly revenue.

Declining issues outnumbered advancing ones on the NYSE by 1,773 to 896. On the Nasdaq, 1,313 issues fell and 1,020 advanced.

The S&P 500 index showed 2 new 52-week highs and 1 new low, while the Nasdaq recorded 11 new highs and 7 new lows.

(Reporting by Tanya Agrawal; Additional reporting by Yashaswini Swamynathan; Editing by Don Sebastian)