Stocks fell on Tuesday as talks to resolve Greece's debt crisis stumbled again and analysts pointed to a short-term top in equity markets after the S&P 500 posted five days of back-to-back gains.

Greece was clinging to hope of a last-minute bond swap deal to avoid a messy default after euro zone officials sent talks back to square one by rejecting a final offer from the country's private bondholders.

The news from Greece overshadowed solid, but largely unspectacular corporate earnings reports. This week marks one of the busiest in the ongoing fourth-quarter earnings season. McDonald's Corp , DuPont, and Johnson & Johnson all tracked flat to lower after reporting on Tuesday.

Given the level of risk and especially the potential for slippage in progress in Europe which could cause angst in U.S. markets and global markets, I wouldn't be advising investors to increase risk at this stage after such a significant rally, said Jeremy Zirin, head of U.S. equities at UBS Wealth Management in New York.

The Dow Jones industrial average <.DJI> dropped 80.98 points, or 0.64 percent, to 12,627.84. The Standard & Poor's 500 Index <.SPX> fell 9.38 points, or 0.71 percent, to 1,306.62. The Nasdaq Composite Index <.IXIC> lost 16.95 points, or 0.61 percent, to 2,767.22.

Technical factors may also be putting a cap on equities.

We continue to see evidence of a short-term peak developing, said Robert Sluymer, a technical analyst at RBC Capital Markets in New York. Within the U.S. equity markets, leading groups are beginning to pause or pull back.

Sluymer saw banks as one sector that may pull back. A recent rally in the sector has encouraged investors after heavy losses last year. There was evidence of weakness as Bank of America Corp fell 1.8 percent to $7.12. The S&P bank sector <.GSPF> was down 1.1 percent.

After less bad news from Europe late last year and signs of an improving U.S. economy, the S&P 500 has run up more than 22 percent from lows in October. Investors were now focused on U.S. earnings in a critical period this week and next.

Results from some large U.S. corporations, including McDonald's Corp , DuPont, and Johnson & Johnson failed to ignite much enthusiasm.

They were on balance decent if not spectacular, said Mark Luschini, chief investment strategist at Janney Montgomery Scott in Philadelphia, adding that he was looking to large industrial companies such at 3M Corp to give an insight into the economy.

DuPont shares fell 0.8 percent to $48.94 after its quarterly revenue missed estimates as a sharp drop in demand, especially for solar and electronic materials, offset higher prices.

McDonald's Corp's quarterly profit beat analysts' estimates as sales at established restaurants rose more than 7 percent in the United States and Europe. The stock fell 2 percent to $98.94.

Johnson & Johnson reported better-than-expected quarterly earnings but took big charges for product recalls, and the diversified healthcare company forecast 2012 earnings below estimates. The shares rose 0.2 percent at $65.14.

Verizon Communications Inc's profit just missed expectations as its wireless business was hit by the high costs of sales of some advanced phones. The shares fell 2.8 percent to $37.31 and were the third biggest drag on the Dow.

The Federal Open Market Committee begins a two-day meeting later Tuesday.

The U.S. central bank also begins a new practice of announcing policymakers' interest rate projections when the meeting ends on Wednesday in a move it hopes will bring greater public clarity to its decision-making.

(Reporting By Edward Krudy editing by Jeffrey Benkoe)