DJI - NEW YORK, Jan 8 (Reuters) - 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 fourth quarter.
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 T.Ndropped 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 quarter.
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 percent.
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 were weak.
"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.
NYMEX - PERTH, Jan 8 (Reuters) - U.S. crude futures inched up in early Asian trading on Tuesday after settling higher in New York as the market focused on the completion of a U.S. pipeline expansion project at the end of the week.
The expansion of the Seaway pipeline to 400,000 barrels per day (bpd) from 150,000 bpd should help reduce the crude oil glut around Cushing, Oklahoma - delivery point of the U.S. benchmark futures contract.
CBOT Soybean - Soybean futures on the Chicago Board of Trade ended mixed, with
the most-active March contract lower on expectations that the U.S. and Brazilian governments would raise their estimates of Brazil's soybean harvest, traders said. But trade was choppy as brokers adjusted positions ahead of a set of U.S. Department of Agriculture crop reports scheduled for release on Friday.
• The USDA on Friday is expected to raise its estimate for Brazil's soybean crop 0.9 percent from last month to a record 81.8 million tonnes, according to a Reuters poll.
• Also, Brazil's CONAB crop supply agency was scheduled to release updated soybean and corn forecasts on Wednesday.Trade expects the USDA on Friday to raise its forecast for global 2012/13 soybean inventories by 0.4 percent from last month to 60.2 million tonnes.
• Trade expects the USDA to raise its estimate of 2012/13 U.S. soybean production by 0.6 percent to 2.988 billion bushels, from 2.971 billion previously.
• Soymeal ended higher while soyoil fell on meal/oil spreading as two major commodity index funds this week begin their annual rebalancing. The DJ-UBS fund announced in October that it would add soymeal to its weightings for 2013, while reducing its holdings in soybeans and soyoil.
FCPO - SINGAPORE, Jan 8 (Reuters) - Malaysian palm oil futures fell to their lowest in more than two weeks on Tuesday, dragged lower by concerns about demand and caution ahead of key industry data due out later in the week.
Prices dropped for the fourth consecutive day, with traders cautious in the run up to Malaysia's Jan. 1-10 export data due Thursday, a gauge of the impact of a zero percent export tax.
Malaysian palm oil stocks likely eased to 2.5 million tonnes in December from a record 2.56 million tonnes, a Reuters survey of five plantation firms showed on Tuesday, but the slight fall did not manage to lift prices as stocks remained high.
"The market should stabilise around 2,400 ringgit and trade in the 2,380-2,450 ringgit range," said a trader with a foreign commodities brokerage in Malaysia. "There's still a lot of uncertainty over demand from China and India."
Traders will be looking to see if major palm oil buyers China and India increase purchases due to the lower export tax.
The benchmark March contract on the Bursa Malaysia Derivatives Exchange lost 1 percent to close at 2,393 ringgit ($787) per tonne. Prices had earlier dropped to an intraday low at 2,382 ringgit, a level last seen on Dec. 21.
Total traded volume stood at 42,454 lots of 25 tonnes each, much higher than the usual 25,000 lots.
Technical analysis showed palm oil is expected to extend losses to 2,371 ringgit per tonne, as its gain from the Dec. 13 low of 2,217 ringgit will be totally reversed, said Reuters market analyst Wang Tao.
Traders were on alert after Malaysia's weather office warned that tropical storms could bring heavy rains and floods to the east coast of the country, disrupting palm oil output in the key producing state of Pahang.
Market players will also focus on official stocks and output data for December which the Malaysian Palm Oil Board is due to release on Thursday, as well as the U.S. Department of Agriculture's report on the 2012 U.S. soybean harvest due out on Friday.
Brent crude futures steadied above $111 per barrel on Tuesday, trading in a tight range, as investors opted for caution ahead of key data from China and a European Central Bank meeting this week.
In competing vegetable oil markets, U.S. soyoil for March delivery fell 0.2 percent in late Asian trade. The most active May soybean oil contract on the Dalian Commodity Exchange closed 0.6 percent lower.
Regional Equities - BANGKOK, Jan 8 (Reuters) - Major Southeast Asian stock markets ended weaker-to-flat on Tuesday, tracking a similar weakness in broader Asia, as market players cashed in gains in large caps but Vietnam hit seven-month highs amid buying interest in banking shares.
Singapore's Straits Times Index fell for a second session, ending down 0.4 percent at a one-week closing low of 3,205.52. Kuala Lumpur Composite Index was down 0.3 percent at 1,688.91, off Monday's record close of 1,694.16.
After a choppy session, Bangkok's SET index ended up 0.14 percent and Jakarta's Composite Index inched up 0.12 percent. The Philippine Composite Index closed slightly higher at 6,048.90, topping Monday's record close of 6,044.91.
Bucking the trend, the Ho Chi Minh Stock Exchange's VN Index jumped 3 percent to close at 447.16, its biggest one-day gain since May 2012. Shares of Bao Viet and Vietcombank rose around 5 percent each.
Foreign investors bought banks amid talks that the central bank was considering raising the foreign ownership ceiling at weak banks.
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