* Ten US banks to pay $8.5 bln to end foreclosure reviews
* Amazon stock hits all-time high on Morgan Stanley view
* Disney looks for cost savings, sources say; shares fall
* Indexes off: Dow 0.6 pct, S&P 0.6 pct, Nasdaq 0.4 pct
By Angela Moon
NEW YORK, Jan 7 U.S. stocks fell on Monday as
banks agreed to pay billions in a settlement with U.S.
regulators and investors speculated that U.S. earnings for the
end of 2012 would be only modestly better than in the previous
Financials declined after a group of home mortgage
servicers, including major U.S. banks, agreed to pay a total of
$8.5 billion to end a government-ordered, case-by-case review of
The KBW bank index, a gauge of U.S. bank stocks, was
down 0.7 percent.
Earnings are expected to be only slightly better than the
third-quarter's lackluster results, and analysts' current
estimates are down sharply from what they were in October.
"There is little doubt that concerns about the fiscal cliff
created spending hesitancy in both consumers and businesses in
the fourth quarter, and it is likely that will adversely impact
earnings season," said Randy Frederick, managing director of
active trading and derivatives at Charles Schwab.
Aluminum company Alcoa Inc will unofficially launch
the reporting season by announcing its results after Tuesday's
The Dow Jones industrial average was down 77.33
points, or 0.58 percent, at 13,357.88. The Standard & Poor's 500
Index was down 8.69 points, or 0.59 percent, at
1,457.78. The Nasdaq Composite Index was down 12.39
points, or 0.40 percent, at 3,089.26.
The day's decline came a session after the S&P 500 finished
at a five-year high and investors booked profits on stocks' best
weekly gain in more than a year, boosted by a budget deal and
economic data. The S&P 500 rose 4.6 percent last week.
Ten mortgage servicers - including Bank of America,
Citigroup, JPMorgan, and Wells Fargo -
agreed on Monday to pay $8.5 billion to end a case-by-case
review of foreclosures required by U.S. regulators.
Bank of America also announced roughly $11.6 billion of
settlements with mortgage finance company Fannie Mae and a $1.8
billion sale of collection rights on home loans.
The bank also entered into agreements with Nationstar
Mortgage Holdings and Walter Investment Management
to sell about $306 billion of residential mortgage
Bank of America shares were down 0.6 percent at $12.04 while
Nationstar Mortgage Holdings jumped 11.3 percent to
JPMorgan shares were down 0.4 percent at $45.16 and
Citigroup shares were down 0.8 percent to $42.07. Wells Fargo
shares fell 1.1 percent to $34.55.
Walt Disney Co started an internal cost cutting
review several weeks ago that may include layoffs at its studio
and other units, three people with knowledge of the effort told
Reuters. Disney shares fell 2.4 percent to $50.95.
Video-streaming service Netflix Inc shares gained
5.8 percent to $101.55 after it said it will carry previous
seasons of some popular shows produced by Time Warner's
Warner Bros Television.
Amazon.com shares hit their highest price ever at
$269.22 after Morgan Stanley raised is rating on the stock.
Shares were up 3.3 percent at $267.77.
Major U.S. technology companies could miss estimates for
fourth-quarter earnings as budget worries likely led some
corporate clients to tighten their belts last month.