Stocks fell on Tuesday as disappointing earnings from blue chips such as 3M and Johnson & Johnson prompted investors to pause in the recent rally.

The pullback is a reaction to a market that's gone up almost without interruption for months, driven by very strong earnings and an improving economy, said Eric Kuby, chief investment officer at North Star Investment Management Corp in Chicago.

Investors will focus on U.S. President Barack Obama's State of the Union speech to Congress on Tuesday at 9 p.m. (0200 GMT Wednesday) in which his remarks could have an impact on energy, infrastructure and other market sectors.

Shares of 3M Co fell 2.1 percent to $88.45 after results barely topped estimates. The diversified manufacturer said profitability suffered last quarter and warned rising raw material costs would pressure its bottom line.

Healthcare company J&J said U.S. sales of consumer products fell sharply and forecast 2011 earnings below expectations, sending its shares down 1.7 percent to $61.19.

The Dow Jones industrial average <.DJI> dropped 34.32 points, or 0.29 percent, to 11,946.20. The S&P 500 <.SPX> fell 4.02 points, or 0.31 percent, to 1,286.82. The Nasdaq Composite <.IXIC> lost 7.76 points, or 0.29 percent, to 2,709.79.

Altogether, six Dow components have reported since the close of trading on Monday.

You have again a lot of earnings reports today, and a couple biggies certainly didn't beat expectations, so that's pouring a little cold water on the rally, Kuby said.

The S&P 500 has risen more than 22 percent since the start of September and ended a seven-week run of gains last Friday following lackluster bank earnings.

The latest economic data showed U.S. consumer confidence rose in January to its highest level in eight months, but single-family home prices fell for a fifth straight month in November.

The economic news is mixed and not much of a catalyst one way or the other, said Doug Roberts, chief investment strategist at

It's almost like people are stepping back, waiting for what the president says.

In his speech, Obama is expected to challenge Republican proposals to cut the federal budget in an effort to slow the growth of the country's $14 trillion debt.

American Express Co fell 3.1 percent to $44.35 a day after reporting results. Investors were worried as it relies more on its processing business, which faces increased regulation.

But not all blue chips disappointed investors. Verizon Communications Inc reported profit and sales slightly below estimates, but the company added far more wireless subscribers than expected in the quarter, and its stock rose 1.6 percent to $35.81.

Travelers Companies Inc rose 1.8 percent to $56.64 after it posted a higher-than-expected quarterly profit and said there were early signs businesses were willing to spend more on insurance.

Healthcare insurers outperformed the market, with the Morgan Stanley Healthcare Payor index <.HMO> up 1.8 percent.

Deutsche Bank said in a note to clients the managed care group is currently trading at roughly a 30 percent discount to the S&P 500 based on consensus estimates.

In early afternoon trading, declining stocks outnumbered advancing ones on the NYSE by a ratio of more than 7 to 5, while on the Nasdaq about eight stocks fell every five that rose.

(Reporting by Rodrigo Campos; additional reporting by Caroline Valetkevitch; Editing by Kenneth Barry)