Overnight Markets: US stocks fall as earnings season starts

US stocks declined on Tuesday, retreating from last week's rally, as companies started to report results for the fourth quarter.

The Dow Jones industrial average dropped 55 points, or 0.41%, to 13,329. The Standard & Poor's 500 Index fell five points, or 0.32%, to 1,457. The Nasdaq Composite Index lost seven points, or 0.23%, to 3,092.

Fourth-quarter earnings are expected to beat the previous quarter's lacklustre results, but analyst estimates are down sharply from October. Quarterly earnings are expected to grow by 2.7%, according to Thomson Reuters data.

Shares of AT&T Inc fell 1.7% after the company said it sold more than 10 million smartphones in the quarter, which means increased costs for the wireless service provider.

Sears Holdings fell 6.4% a day after the company said chairman Edward Lampert would take over as CEO from Louis D'Ambrosio. The US retailer also reported a 1.8% decline in quarter-to-date sales at stores open at least a year.

Restaurant-chain operator Yum Brands declined 4.2% a day after the KFC parent warned sales in China, its largest market, contracted more than expected in the fourth quarter.

GameStop also suffered as shares plunged 6.3% after the video game retailer reported low customer traffic for the holiday season and cut its guidance.

Shares of Monsanto Co gained 2.5% after the world's largest seed company raised its earnings outlook for fiscal year 2013 and posted strong first-quarter results.

Boeing Co. retreated 2.6% after being downgraded to hold from buy at BB&T Capital Markets by equity analyst Carter Leake.

In Asia, shares climbed on Wednesday in afternoon trade after the yen weakened and Alumina Ltd. jumped as partner Alcoa Inc. posted sales that beat estimates.