US STOCKS-Wall St slips as Home Depot profit eases fiscal worry

Tue Nov 13, 2012 8:45pm IST

Stocks

   

* Investors looking for progress on fiscal cliff

* Home Depot shares rally after results, outlook

* Energy shares lower, Microsoft weighs on tech

* Indexes down: Dow 0.1 pct, S&P 0.2 pct, Nasdaq 0.5 pct (Updates to open)

By Ryan Vlastelica

NEW YORK, Nov 13 (Reuters) - U.S. stocks edged lower on Tuesday, with strong results from Home Depot, the world's largest home improvement company, countering fears about the "fiscal cliff," which investors see as a threat to economic growth.

Stocks opened lower but soon cut their losses sharply. Sectors tied to the pace of economic growth, including energy and banking, were among the weakest. Technology shares also were lower, pressured by weakness in Microsoft.

Dow component Home Depot Inc was the top gainer on the S&P 500, climbing 4.4 percent to $63.86 after reporting earnings that beat expectations and raising its outlook. Rival retailer Lowes Companies also gained, up 1.8 percent to $32.57.

The fiscal cliff is a series of budget cuts and tax hikes that begin to take effect in the new year. Market participants worry that if no deal is reached to avoid going over the cliff, the economy could fall back into recession.

Concerns over this possibility contributed to the S&P's worst week since June last week, with no sign of a bottom despite a drop of almost 3 percent over the past two weeks.

"We're back to focusing on macroeconomic issues, with people trying to position themselves ahead of the fiscal cliff, especially with Europe still a threat," said Doug DePietro, head of trading at Evercore Partners in New York. "I don't feel like there's an underlying bid on the market."

U.S. lawmakers returned to Washington Tuesday with a seven-week deadline to reach agreement on the cliff, with most analysts expecting some kind of deal will be forged. But Barclays cut its year-end target for the S&P 500 to 1,325 from 1,395, saying there was "little basis to believe a grand compromise is in the offing."

Energy shares fell 0.3 percent, with Chevron Corp off 0.5 percent at $105.43 and Diamond Offshore losing 0.7 percent to $65.31. If economic growth were to stall because of the cliff, it could depress demand for oil and other commodities.

The Dow Jones industrial average was down 6.21 points, or 0.05 percent, at 12,808.87. The Standard & Poor's 500 Index was down 2.53 points, or 0.18 percent, at 1,377.50. The Nasdaq Composite Index was down 13.14 points, or 0.45 percent, at 2,891.12.

The Nasdaq was pressured by Microsoft, which dropped 3.5 percent to $27 on questions about the company's management. Steven Sinofsky, the executive most widely tipped to be Microsoft's next chief executive, left the software maker barely two weeks after launching Windows 8.

In other earnings news, AK Steel Holding Corp shares fell 10 percent to $4.91 after forecasting a fourth-quarter loss, while Michael Kors Holdings gained 3.9 percent to $52.58 after raising its outlook.

European shares fell 0.5 percent on gloomy German data and negative corporate news. In addition, Greece's international lenders didn't disburse the aid Greece had hoped to use to refinance 5 billion euros of its debt pile by Friday.

Morgan Stanley, which has a lot of exposure to Europe, fell 0.4 percent to $16.71 and pressured other financial companies. (Editing by Kenneth Barry)

Politics

REUTERS SHOWCASE

Fund Raising

Fund Raising

Flipkart raises $700 million in fresh funding.   Full Article 

Reforms Push

Reforms Push

Modi may order insurance, coal reforms if vote delayed - officials.  Full Article 

Reuters Exclusive

Reuters Exclusive

India looks to sway Americans with nuclear power insurance plan  Full Article 

To Boost Growth

To Boost Growth

Crank up public spending to revive growth - chief economic adviser.   Full Article 

Bold Steps

Bold Steps

SpiceJet rescue plan marks bold bet on Indian aviation recovery.   Full Article 

New Airline

New Airline

Tata, Singapore Air venture Vistara to take off on Jan 9.  Full Article 

Online Sales

Online Sales

Knock knock. Who's there? Amazon's best-selling holiday author.  Full Article 

Hacking Attack

Hacking Attack

N.Korea says did not hack Sony, wants joint probe with U.S.  Full Article 

Reuters Poll

Reuters Poll

BSE Sensex to hit 32,980 by December 2015  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device  Full Coverage