Stocks fell Tuesday, retreating further from last week’s rally after the federal budget deal, as companies started to report quarterly results.
In the wake of a 4.3 percent increase in the two sessions around the close of the budget negotiations, the benchmark Standard & Poor’s 500-stock index has fallen, with investors finding few catalysts to extend the rally that took the index 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, Ala.
Stock in AT&T fell 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.
The figure beat the same quarter in 2011, but meant increased costs for AT&T. Wireless service providers like AT&T pay large 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 analysts’ estimates are down sharply from October. Quarterly earnings are expected to grow by 2.7 percent from a year ago, according to Thomson Reuters data.
The Dow dropped 55.44 points, or 0.41 percent, to close at 13,328.85. The S.& P. 500 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,” Mr. 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.
Stock in Sears Holdings fell 6.4 percent to $40.16 a day after the company said the chairman, Edward Lampert, would become chief executive after Louis D’Ambrosio steps down because of a relative’s health. Markets declined as some of the first earnings to be reported were weak.
The Treasury’s benchmark 10-year note rose 11/32, to 97 28/32, and the yield fell to 1.86 percent from 1.90 percent late Monday.
Shares Fall Again as Investors Remain Wary
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Shares Fall Again as Investors Remain Wary
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Shares Fall Again as Investors Remain Wary
