* 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 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
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
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
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
(Editing by Kenneth Barry)