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Stocks close lower as market stalls before earnings season

CNBC logo CNBC 10/9/2017 Fred Imbert

Stocks ended slightly lower Monday as Wall Street looked ahead to the start of earnings season.

The Dow slipped 12 points, the S&P 500 shed 0.18 percent, and the Nasdaq lost 0.16 percent, breaking a nine-session winning streak. 

Some of the major companies scheduled to report quarterly results this week include BlackRock, Citigroup, Bank of America and Wells Fargo.

"It's natural for the market to digest big moves ahead of a major catalyst. In this case, it's earnings season," said Adam Sarhan, CEO of 50 Park Investments.

Equities have been at record levels on renewed hopes of tax reform and strong economic data.

The prospects of tax reform have been a boon to the U.S. stock market since President Donald Trump's election.

Trump "has yet to deliver on cutting taxes and bringing back overseas earnings, but both remain possible," said Ed Yardeni, president and chief investment strategist at Yardeni Research. "If Trump delivers on deregulation and on tax cuts, smaller corporations might benefit more than larger ones."

Shares of Netflix hit an all-time high after the company raised prices on some of its plans last week. Its $10/month high-definition plan now costs $11 and the 4K streaming plan will cost $14 per month, a $2 increase.

The changes affect new U.S. members, while existing members will be alerted of the price change on Oct. 19 ahead of their next billing cycle.

Netflix has learned quite a bit about consumer behavior regarding price increases over the years, and we think the company's nuanced approach may minimize subscriber disruption this time around," said Scott DeVitt, an analyst at Stifel, in a note last week.

"Since the most value-conscious consumers will not see their plan increase in price, the members most likely to cancel will have no reason to," DeVitt said.

Shares of Apple also rose after analysts at Bank of America Merrill Lynch reiterated its buy rating on the stock, noting the company's earnings will jump under the Republican plan to lower corporate taxes.


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