* Market consolidates after "fiscal cliff" rally
* Yum shares fall on shrinkage of sales in China
* Monsanto stock jumps after strong earnings, raised outlook
* GameStop shares slide after sales data, guidance
* Indexes off: Dow 0.5 pct, S&P 500 0.54 pct, Nasdaq 0.56
By Chuck Mikolajczak
NEW YORK, Jan 8 U.S. stocks fell on Tuesday as
the market consolidated from last week's rally on the "fiscal
cliff" deal in Congress and investors awaited the start of the
earnings season with lowered 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 0.7 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.
"The path of least resistance at the moment is lower just
because we had that explosion to the upside after (the debate)
in Washington," said Ken Polcari, director of the NYSE floor
division at O'Neil Securities in New York.
"People are concerned about earnings," Polcari said, adding
that other worries include raising the federal debt ceiling and
automatic spending cuts set to take effect in weeks unless
"You are going to get this kind of apathetic market until
we start to see what earnings look like," he said.
In Tuesday's results, Monsanto Co shares rose 2.6
percent to $98.46 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 66.38
points, or 0.50 percent, to 13,317.91. The Standard & Poor's 500
Index lost 7.88 points, or 0.54 percent, to 1,454.01. The
Nasdaq Composite Index shed 17.31 points, or 0.56
percent, to 3,081.51.
AT&T Inc, which fell 1.8 percent to $34.30, was the
biggest drag 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
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. Rival Verizon Wireless said on Monday
it had its strongest fourth quarter ever.
The S&P telecom services index, down 2.8 percent,
was the worst performing of the 10 major S&P sectors.
Shares of restaurant-chain operator Yum Brands Inc
fell 4.5 percent to $64.82 a day after the KFC parent warned
sales in China, its largest market, shrank more than expected in
the fourth quarter.
Sears Holdings shares slumped 5.4 percent to $40.59
a day after the company said Chairman Edward Lampert would take
over as CEO from Louis D'Ambrosio, who is stepping down due to a
family member's health issue. The U.S. retailer also reported a
1.8 percent decline in quarter-to-date sales at stores open at
least a year.
GameStop shares dropped 4.8 percent to $23.57 as the
worst performer on the S&P 500 after the video game retailer
reported sales for the holiday season and cut its guidance.