US stocks fell on Tuesday after lacklustre quarterly scorecards from some marquee technology companies dampened the mood, and skittish investors locked in profits on recent gains.
Disappointing results from technology consulting firm Accenture Ltd and German software powerhouse SAP slightly deflated ballooning hopes for a strong fourth-quarter earnings season.
Comments from US Federal Reserve Chairman Alan Greenspan also failed to whet investors' appetite for stocks.
Wall Street investors had already started to turn more cautious following a shockingly weak employment report that slammed the market on Friday, analysts said.
"The year ended, and it has been an almost straight line up, and so certainly some professional traders looked to take some profits," said Rick Meckler, president of investment firm LibertyView Asset Management. "There were some slight disappointments today in a few companies, and ever since the employment number came out, the market has been more susceptible."
The Dow Jones industrial average dropped 58.00 points, or 0.55 percent, to 10,427.18, and the Standard & Poor's 500 Index dropped 6.01 points, or 0.53 percent, to 1,121.22.
The technology-laced Nasdaq Composite Index fell 15.34 points, or 0.73 percent, to 2,096.44. Trading was active, with about 1.5 billion shares traded on the New York Stock Exchange and 2.4 billion shares traded on Nasdaq.
The three major market gauges have been on a strong upswing for at least a month. Last week, the S&P 500 and the Dow Jones industrial average reached levels unseen since the spring of 2001, and the Nasdaq Composite hit a 2-1/2 year high.
At a seminar in Berlin organised by Germany's central bank on Tuesday, Greenspan said the burgeoning US current account deficit was manageable and job growth would happen in only "a matter of time." He noted that inflation was quiescent despite a decline in the dollar.
"It seems like expectations were for Greenspan to say the economy is going to be spectacular," said Adam Tracy, director of listed trading at Thomas Weasel. "While his comments were positive, I don't think they lived up to expectations."
Software company Oracle Corp and Siebel Systems fell after German competitor SAP reported a 3 percent drop in quarterly software revenues on Tuesday.
Oracle said after the close on Monday that it named Jeff Henley as chairman, leaving Larry Ellison with the sole title of chief executive. Oracle shares fell 30 cents, or 2 percent, to $14.36, and it was among the Nasdaq's most active stocks.
Accenture Ltd, a technology consulting firm, said its quarterly profit rose, but predicted its current quarter profit could fall below analysts' estimates. Its shares fell $3.25, or 12.5 percent, to $22.66.
Siebel fell 53 cents, or 3 percent, to $15.19, and SAP's American depository receipts lost $2.27, or 5 percent, to $42.18.
In the latest merger news, Abbott Laboratories Inc said on Tuesday it will acquire diabetes test maker TheraSense Inc for $1.2 billion to capitalise on a growing market for diabetes products and boost its own lacklustre monitoring business. TheraSense soared $6.34, or 31 percent, to $26.64, and Abbott rose 24 cents to $44.43.
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