U.S. stocks fell modestly on Tuesday as fresh worries that major banks may need to raise more money overshadowed IBM's dividend boost and reassuring economic data that suggested the economic cycle may be at its bottom.

* Citigroup talked with U.S. govt about capital levels

* New Zealand, Israel confirmed cases of swine flu

* The Dow Jones industrial average <.DJI> shed 8.05 points, or 0.10 percent, to close unofficially at 8,016.95. The Standard & Poor's 500 Index <.SPX> dropped 2.35 points, or 0.27 percent, to 855.16. The Nasdaq Composite Index <.IXIC> fell 5.60 points, or 0.33 percent, to 1,673.81.

(Reporting by Rodrigo Campos)

Israel Ibm Citigroup