Wall Street Pauses after Rally; Bellwether Earnings Eyed

(REUTERS) - Stocks ended little changed on Monday as investors took a pause from a recent rally, awaiting earnings from bellwethers such as Apple later in the week.

The S&P 500 is up nearly 5 percent so far this year as an improving U.S. economy has boosted investor optimism. The Dow and S&P 500 both had their best weekly performances in a month last week.

Investors are reserved after a mixed bag of results. Many companies have announced sluggish results, portraying a cautious environment going forward, said Robert Lutts, chief investment officer at Cabot Money Management in Salem, Massachusetts.

The expectations are very moderate in the market, so a little bit of good news could lead to a significant pop in a stock.

According to Thomson Reuters data, 15 percent of S&P 500 companies have reported earnings, and just 59 percent posted results above Wall Street expectations. That percentage trails the average of about 70 percent, though the rate is expected to improve as earnings season gathers steam.

Among the 117 S&P 500 companies expected to report earnings this weeks is tech company Apple Inc (AAPL.O: Quote, Profile, Research, Stock Buzz), due after the closing bell on Tuesday.

The euro zone crisis remained in the background for the market but has had less of an effect on stocks lately. Germany and France pushed for a deal between Greece and its private creditors, and the two said they still were dedicated to a new bailout needed by Athens by March to stave off default.

The Dow Jones industrial average .DJI slipped 11.66 points, or 0.09 percent, at 12,708.82. The Standard & Poor's 500 Index .SPX was up 0.62 point, or 0.05 percent, at 1,316.00. The Nasdaq Composite Index .IXIC was down 2.53 points, or 0.09 percent, at 2,784.17.

In addition to Apple, a number of Dow components are due to report earnings on Tuesday - Verizon Communications Inc (VZ.N: Quote, Profile, Research, Stock Buzz), Travelers Companies Inc (TRV.N: Quote, Profile, Research, Stock Buzz), McDonald's Corp (MCD.N: Quote, Profile, Research, Stock Buzz), DuPont (DD.N: Quote, Profile, Research, Stock Buzz) and Johnson & Johnson (JNJ.N: Quote, Profile, Research, Stock Buzz).

The Federal Reserve is likely to say this week that it will not start raising interest rates again until the first half of 2014, more than five years after cutting them to near zero, a Reuters poll of leading Wall Street economists showed.

The U.S. central bank will begin a new practice of announcing policymakers' interest rate projections when a two-day meeting ends on Wednesday.

Halliburton Co (HAL.N: Quote, Profile, Research, Stock Buzz) shares fell 2.1 percent to $35.44 after the world's second largest oilfield services group warned the deep slump in U.S. natural gas prices could cause near-term disruptions that pinch first-quarter earnings.

On a positive note, Chesapeake Energy Corp (CHK.N: Quote, Profile, Research, Stock Buzz) gained 6.3 percent to $22.28 after it said it will reduce dry gas drilling and cut production in response to natural gas prices falling below economically attractive levels. Natural gas shares were among the day's best performers, with an index of those stocks rising 3.6 percent.

Research In Motion Ltd (RIM.TO: Quote, Profile, Research, Stock Buzz)(RIMM.O: Quote, Profile, Research, Stock Buzz) fell 8.5 percent to $15.56 as analysts were skeptical about the resignation of the BlackBerry maker's co-chief executives.

Sears Holding Corp (SHLD.O: Quote, Profile, Research, Stock Buzz) fell 3.3 percent to $47.39 after rising as high as $54.76 in what analysts said could be a short squeeze.

The stock is the most shorted stock in the S&P 500, according to Data Explorers, with 94 percent of shares available used to sell short. The retailer has been the best performing stock in the index for the year, up more than 50 percent.

That is a classic short squeeze. There have been headlines all over the name now for the better part of a month or so and it's largely been quite negative, said Peter Kenny, managing director at Knight Capital in Jersey City, New Jersey.