Stocks weakened as the International Monetary Fund lowered its estimate for U.S. economic growth.
Traders are worried that corporate profits might see further slump as both oil and food costs have seen a steady rise. The IMF announcement that rising gas and food prices could slow down the U.S economic growth rate could also phase out the Federal Reserve's bond-buying program has not helped matters.
The Dow Jones industrial average went up 1.06 point, and closed at 12,381.11. The broader S&P 500 index fell 3.71, and closed at 1,324.46. Energy companies went down1.9 percent, which is the highest among any of the 10 company groups on the index.
Alcoa Inc. which reported first-quarter earnings lower than what analysts had estimated went down 2.6 percent to $17.31 in after-hours trading. Amid rising oil prices, analysts are hoping that corporate profit will improve ahead of the ninth consecutive quarter.
During the recovery phase, a majority of companies maintained their earnings by cutting down on jobs and also by reducing expenses.
Howard Silverblatt, senior analyst at S&P index, close to 30 percent of the companies managed to report revenue growth of at least 10 percent. Analysts had estimated Alcoa to report first-quarter revenue jump of $6.16 billion based on increasing global demand for Alcoa aluminum.
Companies are also considering mergers to boost growth rate. For example, Endo Pharmaceuticals bought American Medical Systems Inc. and while Endo saw an increase of 0.5 percent to $41.06, American Medical rose 32 percent to $29.50.
Level 3 Communications jumped 18 percent to $1.70 after buying Global Crossing Ltd., which saw a rise of 69 percent to $24.97.
The jointly collaborated $11.3 billion bid for the acquisition of the parent company of the NYSE by NASDAQ OMX Group Inc. and IntercontinentalExchange Inc. however did not see the light of the day. NYSE Euronext in the meantime has said that they will be acquired by the German exchange operator, Deutsche Boerse in a deal valued at $10 billion. NYSE Euronext saw a drop of 3 percent to $37.59.