US STOCKS-S&P, Nasdaq back off early highs on stimulus jitters

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* Cyclical stocks slip, defensives gain
* Tech, consumer discretionary sectors hit records
* Dow down 0.28%, S&P 500 up 0.15%, Nasdaq up 0.43%

(Updates to mid-afternoon, changes byline)
By Chuck Mikolajczak
NEW YORK, Jan 25 (Reuters) - U.S. stocks pulled back on
Monday from early highs that included a Nasdaq record by
afternoon trading as concerns over the timing and size of fiscal
stimulus curbed optimism about the start of a week of earning
reports from mega-cap companies.
Investors turned their focus to the U.S. Senate, which is
aiming to pass COVID-19 relief legislation before former
President Donald Trump's impeachment trial begins in early
February. Officials in President Joe Biden's administration are trying
to head off Republican concerns that his $1.9 trillion pandemic
relief proposal was too expensive. "We are trying to calibrate not just the amount but the
timing of new stimulus, and both of those, side by side are
almost impossible to analyze," said Art Hogan, chief market
strategist at National Securities in New York.
"If you look at the market's reaction post-election, part of
the ramp we have seen, and it's been pretty significant, has
been on the back of likely stimulus and the timing, which is
sooner rather than later. Now we have to reset our thinking."
The Dow Jones Industrial Average .DJI fell 101.65 points,
or 0.33%, to 30,895.33, the S&P 500 .SPX gained 7.02 points,
or 0.18%, to 3,848.49 and the Nasdaq Composite .IXIC added
68.59 points, or 0.51%, to 13,611.66.
After climbing as much as 1.4% to an intraday record, the
Nasdaq gave back a good portion of its gains, with the so-called
"stay-at-home" winners, including Microsoft Corp MSFT.O ,
Facebook Inc FB.O and Apple Inc AAPL.O , rising following
upbeat results from Netflix Inc NFLX.O last week.
Microsoft, scheduled to report results on Tuesday, rose
1.25% as Wedbush raised its price target on the software maker's
stock on expectations of further growth in its cloud business
for 2021. The S&P 500 sectors housing large-cap growth stocks hit
record highs earlier in the session, including technology
.SPLRCT , consumer discretionary .SPLRCD and communication
services .SPLRCL .
Wall Street's main indexes hit all-time highs last week on
hopes of a more complete economic reopening and smooth vaccine
distribution across the country, which is suffering from more
than 175,000 new COVID-19 cases daily with millions out of work.
Earlier on Monday, drugmaker Merck & Co MRK.N said it
would stop development of its two COVID-19 vaccines. The
drugmaker's shares slipped -0.11%. Sectors that have performed well on hopes for an economic
rebound, such as financials .SPSY , energy .SPNY and
materials .SPLRCM , led declines on Monday, while defensive
utilities .SPLRCU , consumer staples .SPLRCS and real estate
.SPLRCR outperformed.
Declining issues outnumbered advancing ones on the NYSE by a
1.44-to-1 ratio; on Nasdaq, a 1.27-to-1 ratio favored decliners.
The S&P 500 posted 27 new 52-week highs and no new lows; the
Nasdaq Composite recorded 302 new highs and 4 new lows.