US STOCKS-Market dips on financials' poor profit view

(Updates to late morning)

By Jennifer Coogan

NEW YORK, Dec 4 (Reuters) - U.S. stocks fell on Tuesday after a brokerage cut its earnings outlook for major Wall Street companies and as uncertainty about the outlook for a credit crisis recovery mounted.

Shares of Goldman Sachs (GS.N: Quote, Profile, Research, Stock Buzz), Lehman Brothers (LEH.N: Quote, Profile, Research, Stock Buzz), Merrill Lynch MER.N and Morgan Stanley (MS.N: Quote, Profile, Research, Stock Buzz) fell after JPMorgan Chase (JPM.N: Quote, Profile, Research, Stock Buzz) cut its earnings estimates on the brokerages, citing writedowns, slowdowns in mergers and acquisitions and reduced opportunities for other fees.

Analysts said expectations for a Federal Reserve interest-rate cut were already reflected in a four-day rally by stocks last week. The market awaited Friday's November employment report for the next hint about the future course of rates. The Fed's next policy meeting is set for Dec. 11.

"Financials are a little bit of a drag on sentiment today," said Marc Pado, U.S. market strategist at Cantor Fitzgerald & Co. in San Francisco. "There's an awful lot coming up, and it behooves many just to sit to the sidelines and wait."

The Dow Jones industrial average .DJI was down 20.73 points, or 0.16 percent, at 13,293.84. The Standard & Poor's 500 Index .SPX was down 6.09 points, or 0.41 percent, at 1,466.33. The Nasdaq Composite Index .IXIC was down 5.33 points, or 0.20 percent, at 2,631.80.

A top U.S. Treasury official said market anxiety had deepened, an assessment borne out by ever tighter interbank rates, and the process of rebuilding confidence would be "long and slow." For details, see [ID:nL04419971].

Goldman Sachs cut its forecast for 2007 and 2008 operating earnings per shares for S&P 500 companies. [ID:nN04205097].