Shares Fall on Fear of Rising Commodity Prices

Stocks fell Monday in the lightest volume session of the year after a lower outlook from Kimberly-Clark heightened concern that higher commodity costs would squeeze profits in coming quarters.

About 5.34 billion shares traded on the New York Stock Exchange, the American Stock Exchange and Nasdaq, below the daily average of 7.74 billion.

Kimberly-Clark fell 2.7 percent to $64.24 after it cut the low end of its full-year outlook because the costs of pulp and other goods rose more than twice as much as it had expected.

The threat of rising commodity costs will remain in the spotlight for one of the busiest weeks of earnings, with 180 companies listed in Standard & Poor’s 500 scheduled to report this week, including other major consumer names like Procter & Gamble and Colgate-Palmolive.

“That is going to be the next thing that happens — the forward guidance is going to start to become impacted because of higher prices,” said Kenneth Polcari, managing director of ICAP Equities in New York.

Kimberly-Clark, maker of Kleenex tissue and Huggies disposable diapers, is among companies highly vulnerable to rising commodity costs because its products contain oil-based materials and paper.

The Dow Jones industrial average fell 26.11 points, or 0.21 percent, to 12,479.88. The Standard & Poor’s 500-stock index shed 2.13 points, or 0.16 percent, to 1,335.25. The Nasdaq composite index gained 5.72 points, or 0.20 percent, to 2,825.88.

Johnson Controls fell 2.8 percent to $39.60 after the company, one of the world’s largest auto suppliers, said its fiscal third-quarter results would be hit by a decline in car production after the earthquake in Japan last month, which has disrupted the supply of auto parts and forced auto companies to idle plants.

Through Monday, 75 percent of the 151 companies in the S.& P. 500 that have reported results this quarter have beaten analysts’ expectations. That is just above the average over the last four quarters but well above the average of 62 percent since 1994, according to Thomson Reuters data.

The Nasdaq edged higher, helped by SanDisk, a maker of flash memory cards, up 1.6 percent at $49.78 after raising its 2011 margin outlook late on Thursday. The markets were closed last week for Good Friday.

But energy and materials companies’ shares ranked among the worst performers, with the PHLX oil service sector index off 0.9 percent and the S.& P. Materials Index down 0.7 percent. Oil prices slipped in thin, choppy trade as a sell-off in silver from near record highs lifted the dollar off its lows, prompting a bout of profit-taking in crude.

Company earnings reports this week include Amazon.com, Coca-Cola and Microsoft and the energy companies Exxon Mobil and Chevron.

Regarding expectations for this week’s batch of energy companies’ earnings, Mr. Polcari added: “They are all projected to be better because of high oil prices and all that stuff — great for them, but not good for anyone else.”

The week’s economic agenda includes a two-day meeting of the Federal Reserve’s policy-making committee on Tuesday and Wednesday. The Fed chairman, Ben S. Bernanke, will hold the first of four annual news conferences on Wednesday after the Federal Open Market Committee’s meeting.

Investors will look for clues about the direction of monetary policy when the Fed’s bond-buying program ends in June.

Interest rates fell on Monday. The Treasury’s benchmark 10-year note rose 9/32, to 102 5/32, and the yield slipped to 3.36 percent from 3.40 percent late Thursday.