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)

Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

BACK IN JAIL

REUTERS SHOWCASE

Modi Hurdle

Modi Hurdle

Appointment of Arvind Subramanian as chief economic adviser hits Modi hurdle.  Full Article 

USL Board

USL Board

Diageo bars United Breweries from appointing independent director at United Spirits.  Full Article 

Amazon in India

Amazon in India

Amazon to sell packaged food and beverages in India - Economic Times.  Full Article 

iOS 8 Issue

iOS 8 Issue

iOS 8 causing Bluetooth connectivity issues - Apple news blog  Full Article 

NYT Job Cut

NYT Job Cut

New York Times to cut jobs as new products disappoint  Full Article 

Factory Activity

Factory Activity

Factories expand at slowest pace this year in September  Full Article 

Monetary Policy

Monetary Policy

RBI not biased towards either raising or cutting rates - Rajan  Full Article 

Weak Demand

Weak Demand

Weak demand hits factory activity across Asia, Europe  Full Article 

Pimco Fund

Pimco Fund

Pimco Total Return Fund posts record $23.5 bln net outflow in Sept  Full Article 

Reuters India Mobile

Reuters India Mobile

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