US STOCKS-Wall St falls as blue chips' earnings disappoint

* 3M warns on rising costs; J&J sales disappoint

* Consumer confidence hits 8-month high, home prices fall

* Stocks down: Dow 0.5 pct, S&P 0.6 pct, Nasdaq 0.5 pct

* For up-to-the-minute market news see [STXNEWS/US] (Updates to late afternoon; changes byline)

By Angela Moon

NEW YORK, Jan 25 (Reuters) - U.S. stocks fell on Tuesday after disappointing profits and outlooks from blue chips such as 3M and Johnson & Johnson prompted investors to pause in the recent rally.

Shares of 3M Co fell 3 percent to $87.67 after results barely topped estimates. The diversified manufacturer said profitability suffered last quarter and warned rising raw material costs would pressure its bottom line. For details, see [ID:nN21247179].

Healthcare company J&J said U.S. sales of consumer products fell sharply and forecast 2011 earnings below expectations, sending its shares down 2 percent to $60.96. [ID:nN24208969].

"Today seems to be the risk-off day, compared to yesterday which was a risk-on day," said John Canally, investment strategist at LPL Financial in Boston.

"The expectations (for earnings) are very high, so even with a little bit of disappointment, we get a pause like today."

The Dow Jones industrial average <.DJI> was down 60.17 points, or 0.50 percent, at 11,920.35. The Standard & Poor's 500 Index <.SPX> was down 7.15 points, or 0.55 percent, at 1,283.69. The Nasdaq Composite Index <.IXIC> was down 14.03 points, or 0.52 percent, at 2,703.52.

With reports in from 22 percent of S&P 500 companies, earnings for the fourth quarter are now expected to have increased 34.9 percent from a year earlier, according to Thomson Reuters data. That forecast was up from 31.9 percent at Jan. 1.

Seventy percent of companies that have reported have exceeded analyst earnings expectations, well above the 62 percent in a typical quarter but in line with the percentage of companies beating estimates in recent quarters, the data showed.

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). His remarks could have an impact on energy, infrastructure and other market sectors. For a related factbox, see [ID:nN25251175]

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. [ID:nN25260229].

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

"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 U.S. government debt, now about $14 trillion.

American Express Co fell 3 percent to $44.43 a day after reporting results. Investors were worried as it relies more on its processing business, which faces increased regulation. [ID:nN24205148].

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 percent to $35.58. [ID:nN25241355]

Travelers Companies Inc rose 1.8 percent to $56.62 after it posted a higher-than-expected quarterly profit and said there were early signs businesses were willing to spend more on insurance. [ID:nSGE70N0D3]. (Reporting by Angela Moon, Editing by Kenneth Barry)