By Caitlin Ostroff and Amber Burton 

U.S. stocks closed slightly lower on Tuesday, a day after major indexes hit records and as investors readied for a slew of blue-chip earnings.

For the session, the S&P 500 fell 5.74 points, or 0.2%, to 3849.62 after hitting a new intraday record at 3870.90. The technology-focused Nasdaq Composite edged down 9.93 points, or 0.1%, to 13626.06. The Dow Jones Industrial Average fell about 23 points, or 0.1%, to 30937.04.

Stocks have steadily climbed higher in recent weeks. Investors are now closely watching to see if earnings can top analysts' expectations and provide a further catalyst to push markets higher.

"What's working in the market's favor is the overall trend of economic growth is still robust and that's likely to translate to positive earnings," said Shoqat Bunglawala, head of multiasset solutions, international, at Goldman Sachs Asset Management. "There's an expectation that there's going to be more robust growth driven by pent up demand in the second half of the year."

In the slate of companies reporting quarterly results, shares of General Electric gained 30 cents, or 2.7%, to $11.29 after the industrial conglomerate reported forecast-beating fourth-quarter revenue and free cash flow.

Johnson & Johnson rose $4.50, or 2.7%, to $170.48 after it recorded stronger sales in its latest quarter, as revenue gains from its pharmaceutical division boosted its top-line results. Raytheon Technologies jumped 92 cents, or 1.4%, to $67.20 after the aerospace and defense company reported fourth-quarter profit and revenue that beat expectations.

Starbucks, Microsoft and Texas Instruments released earnings results Tuesday after the markets closed. Starbucks reported adjusted earnings of 61 cents a share, beating analysts' expectations. The coffee chain said that Covid-19 store closures weighed on the company.

Microsoft reported higher earnings in the latest quarter, while sales were up 17%. Shares rose more than 5% in after-hours trading.

Texas Instruments also reported an improved profit.

Major tech firms, including Apple, Tesla and Facebook, will update investors Wednesday.

Among other movers, shares of GameStop rose $71.19, or over 92%, to $147.98 as individual traders, propelled by social media, piled into the stock. Shares swung wildly Monday and have gained more than 300% this year, in the latest sign that frenetic trading by retail traders is leading to outsize market swings.

Software and services firm BlackBerry, another favorite among individual traders, rose 89 cents, or 0.5%, to $18.92. Etsy fell $4.40, or 2.1%, to $204.41 after an earlier rise following Tesla Chief Executive Elon Musk tweeted "I kinda love Etsy."

In bond markets, the yield on the benchmark 10-year U.S. Treasury note ticked up to 1.039% from 1.038% Monday. Yields rise when prices fall.

The Conference Board released its index Tuesday of consumer confidence, which showed U.S. consumers' outlook on the economy improved in January. Consumer confidence increased to 89.3 in January from 87.1 in December.

"The Conference Board number was pretty similar to what we've seen in a lot of other indications, which is current conditions are pretty weak, but people's expectations are optimistic or positive," said Tom Hainlin, national investment strategist at U.S. Bank Wealth Management.

Mr. Hainlin's focus remains on the vaccine rollout and the first 100-day agenda of the new Biden administration and what impact that will have on big sectors in the economy.

U.S. home-price growth continued to accelerate toward the end of 2020, data out Tuesday showed. In the year to November, the S&P CoreLogic Case-Shiller National Home Price Index, which measures average home prices in major metropolitan areas, rose 9.5%.

The pan-continental Stoxx Europe 600 rose 0.6%. Shares of UBS Group rose 41 cents, or 2.8%, to $14.94 after the Swiss bank announced a new buyback program of up to $4.5 billion, having closed 2020 with a consensus-beating quarterly performance.

Travel and transportation stocks were hit hard on concerns about the speed of vaccine rollouts and the timing of some countries' reopenings. Jet-engine maker Rolls-Royce was down about one cent, or 3.4%, to $1.41, its lowest level of the year.

Indexes in Asia handed back some of the robust gains registered in the first few weeks of this year. The Hang Seng Index in Hong Kong dropped 2.6%, as heavyweight Tencent Holdings fell 6.3%, retreating from a record high reached in the previous session. The Shanghai Composite shed 1.5%, the Nikkei 225 retreated 1% and South Korea's Kospi Composite lost 2.1%.

In a surprise move, the People's Bank of China withdrew 78 billion yuan, or the equivalent of $12 billion, from the Chinese financial system through open-market operations Tuesday. The move runs counter to expectations in the run-up to the Lunar New Year holidays, when China's banking system usually needs more, not less, liquidity.

Joanne Chiu contributed to this article.

Write to Caitlin Ostroff at caitlin.ostroff@wsj.com and Amber Burton at Amber.Burton@wsj.com

(END) Dow Jones Newswires

January 26, 2021 17:22 ET (22:22 GMT)

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