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US STOCKS-Wall St falls as retailers, Caterpillar weigh

* Retailers' shares slide after earnings

* GM recalls another 2.42 million vehicles

* Aeroflex jumps, to be acquired by Cobham for $1.46 bln

* Dow off 0.9 pct; S&P 500 down 0.7 pct; Nasdaq off 0.8 pct

(Updates to midday trading, adds GM recall)

NEW YORK, May 20 (Reuters) - U.S. stocks fell on Tuesday as retailers' shares dropped after earnings from TJX Companies and Staples halted the market's two-day winning streak.

TJX Cos Inc shares slumped 7 percent to $54.34 and ranked as the biggest drag on the S&P 500 after the owner of off-price chain stores TJ Maxx and Marshalls reported lower-than-expected quarterly revenue.

Staples Inc tumbled 13.1 percent to $11.64 after the office supply retailer posted first-quarter earnings and forecast a decline in sales in the current quarter. The S&P retail index fell 0.8 percent.

But Home Depot shares managed to rebound from pre-market declines after the company's chief financial officer said sales in May were "robust," taking the sting out of its disappointing first-quarter results due to the severe winter. Home Depot rose 2.2 percent to $78.21 and was the S&P 500's best performer.

Caterpillar shares dropped 2.8 percent to $102.48, weighing on the industrial sector after the heavy machinery company said retail statistics for the three-month rolling period ending in April were down 13 percent.

"So not only is the retail sector not doing well, but neither is heavy construction. It's a little more concerning in the larger equipment realm because to me, that says new projects aren't being picked up either," said Kim Forrest, senior equity research analyst at Fort Pitt Capital Group in Pittsburgh.

The Dow Jones industrial average fell 142.59 points or 0.86 percent, to 16,369.27. The S&P 500 lost 13.71 points or 0.73 percent, to 1,871.37. The Nasdaq Composite dropped 33.70 points or 0.82 percent, to 4,092.11.

Dick's Sporting Goods estimated current-quarter earnings way below analysts' average estimate and cut its full-year 2014 adjusted earnings and same-store sales growth forecasts due to weak demand for its golf and hunting products. Its stock plunged 17.3 percent to $43.96.

Equities have pulled back more than 1 percent since the Dow and the S&P 500 hit record closing highs on May 13 as investors look for signs confirming an acceleration in the U.S. economy that many had hoped to see at this point in the year.

General Motors shares lost 1.6 percent to $33.70 after the No. 1 U.S. automaker said it is recalling another 2.42 million vehicles in the United States and doubling the charge it expects to take in the second quarter to about $400 million.

In contrast, Aeroflex Holding Corp shares jumped 25.6 percent to $10.44. British aerospace and defense supplier Cobham is buying the U.S. communications equipment maker for $1.46 billion, including the assumption of Aeroflex's debt.

(Editing by Bernadette Baum and Jan Paschal)