US stocks : Dow down 0.55 pct

Jan 09 2013, 01:59 IST
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SummaryU.S. stocks declined as the market continued its retreat from last week's rally on the "fiscal cliff" deal in Congress.

U.S. stocks declined on Tuesday as the market continued its retreat from last week's rally on the "fiscal cliff" deal in Congress as investors awaited the start of the earnings season with muted expectations.

Profits in the fourth quarter are seen above the previous quarter's lackluster results, but analysts' current estimates are down sharply from where they were in October. Quarterly earnings are expected to grow by 2.7 percent, according to

Thomson Reuters data.

The benchmark S&P index has fallen 0.5 percent in the wake of the 4.3 percent jump in the two days surrounding the conclusion of the fiscal cliff debate, and investors have found few catalysts to extend the brief rally.

"We had a brief respite courtesy of what happened on the fiscal cliff deal and the flip of the calendar with new money coming into the market," said Bucky Hellwig, senior vice president at BB&T Wealth Management in Birmingham, Alabama.

"But now the stark reality of uncertainty with regard to earnings, plus the negotiations on the debt ceiling, are there and that doesn't give investors a lot of reason to take bets on the long side."

In Tuesday's results, Monsanto Co shares rose 2.6 percent to $98.45 after hitting a more than four-year high at $99.99. The world's largest seed company raised its earnings outlook for fiscal 2013 and posted strong first-quarter results.

Education provider Apollo Group and Dow component Alcoa Inc, the largest U.S. aluminum producer, round out the start of earnings season after the closing bell.

The Dow Jones industrial average dropped 73.13 points, or 0.55 percent, to 13,311.16. The Standard & Poor's 500 Index lost 6.91 points, or 0.47 percent, to 1,454.98. The Nasdaq Composite Index fell 12.68 points, or 0.41 percent, to 3,086.13.

AT&T Inc, which fell 1.8 percent to $34.30, was among the biggest drags on the S&P 500 after the company said it had sold more than 10 million smartphones in the quarter, topping the same quarter in 2011 but also increasing costs for the wireless service provider.

Providers like AT&T pay hefty subsidies to handset makers so that they can offer device discounts to customers who commit to two-year contracts.

The S&P telecom services index, down 2.4 percent, was the worst performing of the 10 major S&P sectors.

Shares of restaurant-chain operator Yum Brands Inc fell 4.2 percent to $65.04 a day after the KFC parent warned sales in China, its largest market, shrank more than expected in the fourth quarter.


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