US stocks fall for second day, as earnings loom

NEW YORK (AFP) - US stocks sank for a second day on Tuesday as the fourth quarter earnings season opened and as confidence slipped after last week's big gains.

At the close the Dow Jones Industrial Average was down 55.44 points (0.41 per cent) at 13,328.85.

The broad-based S&P 500 fell 4.74 (0.32 per cent) to 1,457.15, while the tech-heavy Nasdaq Composite lost 7.00 (0.23 per cent) at 3,091.81.

The fall paralleled the trend around the world, with markets in Asia and Europe mostly finishing modestly lower in the absence of much positive news.

Wariness held sway as the fourth quarter earnings season was opening Tuesday, with Alcoa releasing its results after the closing bell.

Alcoa turned in income of US$242 million, up from a loss a year earlier, despite falling aluminum prices.

The shares traded flat at US$9.10 during the day and pushed up 1.7 per cent in after hours trade.

Monsanto shares surged 2.7 per cent after it reported a 169 per cent rise in profit for its fiscal first quarter, ended Nov 30, on strong genetically modified corn seed sales in the United States and Latin America.

Biotech and pharmaceutical company Celgene gained 6.6 per cent after raising its guidance for 2012 income and earning an upgrade from analysts at RBC Capital markets.

Retailer Sears Holdings sank 6.4 per cent after the company announced that chief executive Lou D'Ambrosio, whom investors had hoped would engineer a turnaround, was leaving due to family illness. Edward Lampert, a hedge fund billionaire, will replace him.

Boeing shares fell 2.6 per cent as attention focused on a fire that broke out in one of its new 787 Dreamliner aircraft as it sat empty at a Boston airport on Monday.

Verizon (-2.4 per cent) and AT&T (-1.7 per cent) fell on worries that smaller rival T-Mobile could mount a potent challenge to their business model by ending subsidies on smartphones sold to new subscribers.

Fast food franchiser Yum Brands, which controls Pizza Hut, Taco Bell and Kentucky Fried Chicken, lost 4.4 per cent after divulging that its China business, the source of strong growth in recent years, would be hit in fourth-quarter reporting by a slowdown in KFC sales.

Bond prices gained. The yield on the 10-year US Treasury fell to 1.87 per cent from 1.91 per cent late Monday, while the 30-year moved down to 3.07 per cent from 3.10 per cent. Bond prices and yields move inversely.

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