* AT&T drags on S&P after announcing phone sales
* Monsanto stock jumps on strong earnings, raised outlook
* Sears falls more than 6 pct as Lampert takes helm
* Indexes down: Dow 0.4 pct, S&P 500 0.3 pct, Nasdaq 0.2 pct
By Gabriel Debenedetti
NEW YORK, Jan 8 U.S. stocks fell on Tuesday,
retreating from last week's rally on the "fiscal cliff" deal in
Washington, as companies started to report results for the
After a 4.3 percent jump in the two sessions around the
close of the fiscal cliff negotiations, the S&P has declined a
bit, with investors finding few catalysts to extend the rally
that took the benchmark to five-year highs.
"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.
Shares of AT&T Inc dropped 1.7 percent to $34.35,
making it one of the biggest drags on the S&P 500, after the
company said it sold more than 10 million smartphones in the
This figure beat the same quarter in 2011, but also means
increased costs for the wireless service provider. Providers
like AT&T pay hefty subsidies to handset makers so that they can
offer discounts to customers who commit to two-year contracts.
Fourth-quarter profits are expected to beat the previous
quarter's lackluster results, but analyst estimates are down
sharply from October. Quarterly earnings are expected to grow by
2.7 percent, according to Thomson Reuters data. Dow component
Alcoa, the largest U.S. aluminum producer, reported results
after the closing bell.
The Dow Jones industrial average dropped 55.44
points, or 0.41 percent, to 13,328.85. The Standard & Poor's 500
Index fell 4.74 points, or 0.32 percent, to 1,457.15. The
Nasdaq Composite Index lost 7.01 points, or 0.23
percent, to 3,091.81.
"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," Hellwig said.
With AT&T's fall, the S&P telecom services index was
the worst performer of the 10 major S&P sectors, down 2.7
p e rcent.
Sears Holdings shares dropped 6.4 percent to $40.16
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.
Markets went lower as some of the first reported earnings
"It doesn't seem to be bouncing back, it might stay here or
sell off a little further," said Stephen Carl, head of U.S.
equity trading at The Williams Capital Group in New York.
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.
GameStop was one of the worst performers on the S&P
500 as shares slumped 6.3 p ercent to $23.19 a fter the video game
retailer reported low customer traffic for the holiday season
and cut its guidance.
Shares of Monsanto Co gained 2.5 percent to $98.42
a fter reaching a more than four-year high at $99.99. The world's
largest seed company raised its earnings outlook for fiscal year
2013 and posted strong first-quarter results.
Volume was below the 2012 average of 6.42 billion shares
traded per day, as 6.19 billion were traded on the New York
Stock Exchange, NYSE MKT and Nasdaq.
Declining stocks outnumbered advancing ones on the NYSE by
1,495 to 1,458, while on the Nasdaq decliners beat advancers
1,305 to 1,158.