* Tesla and Netflix slide; social media, biotech stocks drop
* Empire State manufacturing index misses forecast; CPI edges up
* Dow down 0.4 pct; S&P 500 off 0.5 pct; Nasdaq down 1.6 pct (Updates to midday)
By Chuck Mikolajczak
NEW YORK, April 15 (Reuters) - U.S. stocks fell on Tuesday as early gains evaporated when momentum shares once again lost ground, overshadowing a jump in Coca-Cola and Johnson & Johnson after their quarterly earnings.
The Nasdaq slid more than 1 percent, weighed down by another downturn in momentum names. In recent weeks, momentum names - stocks seen by investors as having high growth potential - have been under pressure after a meteoric rise in their prices took valuations to levels that appeared to be unsustainable.
Tesla Motors Inc fell 5.5 percent to $187.25 and NetFlix Inc dropped 4.5 percent to $316.82 to rank among the worst performers in the Nasdaq 100 index.
The Global X Social Media index, whose components include Facebook, LinkedIn and Yelp, fell 2.7 percent. The exchange-traded fund, designed to measure the performance of companies in the social media industry, has dropped nearly 22 percent since the end of February. The Nasdaq Biotech index dropped 2.8 percent. The index, whose components include Alexion Pharmaceuticals and Biogen Idex, has lost more than 20 percent over the past six weeks. Those losses put both indexes in bear market territory, which Wall Street defines as a drop of 20 percent from a peak.
"They reached a level where the pricing was absurd in terms of the valuation of these companies, and for whatever reason, the market has woken up to the fact and is now correcting to get them back down to a reasonable valuation," said Stephen Massocca, managing director of Wedbush Equity Management LLC in San Francisco.
"And suddenly everyone realizes the emperor has no clothes."
Coca-Cola Co shot up 3.3 percent to $40.01 and gave the biggest boost to the S&P 500 after the U.S. soft drink maker reported better-than-expected quarterly revenue. Strong sales in China more than offset a drop in Europe and flat volumes in North America, Coca-Cola said.
Fellow Dow component Johnson & Johnson rose 1.1 percent to $98.24 after the company posted quarterly earnings well above Wall Street's expectations. Brisk sales of new prescription drugs balanced weak sales of consumer products, according to J&J, which slightly raised its full-year profit view.
The Dow Jones industrial average fell 63.90 points or 0.40 percent, to 16,109.34. The S&P 500 lost 9.89 points or 0.54 percent, to 1,820.72. The Nasdaq Composite dropped 63.648 points or 1.58 percent, to 3,959.046.
Economic data continued to point to a sluggish recovery.
A gauge of manufacturing in New York state grew at a much slower rate in April than it did in March, coming in far below expectations. The U.S. Consumer Price Index increased 0.2 percent in March, although inflation pressures remained generally benign.
The National Association of Home Builders said homebuilder sentiment edged up in April but remained mostly dour on lingering concerns about stiff credit conditions for buyers and tight supply of building lots and labor.
S&P 500 companies' first-quarter earnings are projected to have increased just 1 percent from a year ago, Thomson Reuters data showed. The forecast is down sharply from the start of the year, when profit growth was estimated at 6.5 percent.
Investors will be looking at the impact of harsh winter weather on first-quarter earnings and watching for signs of corporate optimism about the second quarter.
Aaron's Inc shares slumped 5.1 percent to $28.93 after the rent-to-own furniture and electronics retailer said it had rejected a $2.3 billion takeover offer from a major shareholder and instead acquired a retail credit financing firm for about $700 million.
Barcode printer maker Zebra Technologies said it would buy Motorola Solutions's enterprise business, which makes rugged mobile computers, tablets and barcode scanners, for $3.45 billion in cash. Motorola Solutions shares slipped 1.3 percent to $62.94 and Zebra Tech tumbled 11 percent to $60.76. (Reporting by Chuck Mikolajczak; Editing by Jan Paschal)