Apple slumped even after proxy advisory firm Glass Lewis said it backs Apple's proposition 2—the ability for the iPhone maker to issue preferred stock, but with the approval with shareholders. Top proxy firm ISS made a similar recommendation last week.
Earlier, CEO Tim Cook said he will "thoroughly consider" hedge fund manager David Einhorn's cash-return proposal.
"Apple makes bold and ambitious bets on product, and we're conservative financially...To add to that fact, we're returning $45 billion to shareholders through a combination of dividends and buybacks," said Cook, speaking at Goldman Sachs' Technology and Internet conference. "Last quarter alone, the cash flow from operations was over $23 billion. It's an incredible privilege where we can seriously consider returning additional cash to our shareholders. The management team and the board are in very-active discussions. That's what our shareholders want." (Read More:
Cook: Apple Doesn't Have 'Depression' Mentality
Among earnings, Coca-Cola declined to lead the Dow laggards after the beverage giant posted revenue that was slightly below expectations, hurt by weakness in Europe.
Michael Kors soared after the specialty retailer blew past earnings expectations and topped revenue estimates, as same-store sales surged and the company added new stores.
Fossil climbed after the fashion accessories retailer edged past earnings and revenue forecasts, thanks to strong revenue growth in North America and Asia.
Avon Products surged more than 20 percent to lead the S&P 500 gainers after the beauty and personal products company posted better-than-expected earnings.
Cliffs Natural Resources, Buffalo Wild Wings and Clearwire are among notable companies slated to post earnings after the closing bell.
So far, more than 71 percent of S&P 500 companies have posted quarterly results, with 70 percent of companies exceeding earnings expectations and 66 percent topping revenue estimates, according to Thomson Reuters. If all remaining companies report earnings in line with forecasts, earnings will be up 5.3 percent from last year's fourth quarter.
On the tech front, Facebook declined after Bernstein downgraded the social-networking giant to "market perform" from "outperform." And Qualcomm slid after JPMorgan cut its rating on the semiconductor company to "neutral" from "overweight."
On the economic front, small business sentiment edged up in January to 88.9 last month, according to the optimism index from the National Federation of Independent Business, as owners anticipated better business conditions in the next six months, despite higher taxes and looming government spending cuts.
Treasury prices held their losses after the government auctioned $32 billion in 3-year notes at a high yield of 0.411 percent. The bid-to-cover ratio was 3.59.