NEW YORK (Reuters) - 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 Congress acts.
"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
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 <.dji> dropped 66.38 points, or 0.50 percent, to 13,317.91. The Standard & Poor's 500 Index <.spx> lost 7.88 points, or 0.54 percent, to 1,454.01. The Nasdaq Composite Index <.ixic> shed 17.31 points, or 0.56 percent, to 3,081.51.
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
The S&P telecom services index <.gspl>, down 2.8 percent, was the worst performing of the 10 major S&P sectors.
Shares of restaurant-chain operator Yum Brands Inc
(Reporting by Chuck Mikolajczak; Editing by Kenneth Barry)