Wall Street dips, focus shifts back to fiscal, Europe worries
By Angela Moon | November 15, 2012 3:21 AM EST
Stocks fell on Wednesday, erasing earlier gains, as strong earnings from technology bellwether Cisco weren't enough to offset investor anxiety over U.S. budget negotiations and Europe's economic troubles.
Wall Street had opened higher after Dow component Cisco Systems Inc
The S&P 500 has fallen 3.8 percent over the past five trading days. The index closed below its 200-day moving average for a fourth day in a row on Tuesday, a technical indicator that suggests recent declines could gain momentum.
"Under this scenario, there is near-term downside risk to 1,330-1,350 (on the S&P 500), the index's lower trend channel extended from its June low," said Ari Wald, analyst at PrinceRidge Group, in New York.
The Dow Jones industrial average <.DJI> was down 51.30 points, or 0.40 percent, at 12,704.88. The Standard & Poor's 500 Index <.SPX> was down 4.94 points, or 0.36 percent, at 1,369.59. The Nasdaq Composite Index <.IXIC> was down 3.27 points, or 0.11 percent, at 2,880.62.
Despite Cisco's gains Wednesday, the broader technology sector has been weak lately, dropping almost 10 percent over the past two months on earnings disappointments from Google
Also in earnings news, Abercrombie & Fitch Co soared 27 percent to $39.65 after reporting a steep rise in its quarterly profit and a full-year forecast that beat analysts' estimates. Staples Inc
Abercrombie, Cisco and Staples made up the top three percentage gainers on the S&P 500.
But broader trading will likely be partially dictated by macroeconomic issues as investors grapple with the impact of Europe's debt crisis and the U.S. "fiscal cliff" - a series of large, mandated tax hikes and spending cuts that start to take effect next year.
Analysts say serious fiscal negotiations are still weeks away, but failure to reach a deal in Congress could tip the world's largest economy into recession.
Retail sales fell 0.3 percent in October, hurt by the impact of a recent devastating storm in the U.S. northeast. The drop was slightly more than expected but stocks barely reacted to the data. Producer prices fell 0.2 percent in October, compared with expectations for a 0.2 percent rise.
A separate piece of data showed U.S. business inventories rose more than expected in September but stocks excluding automobiles were flat for a second month, which could prompt economists to lower their estimates for third-quarter growth.
European shares <.FTEU3> fell as Greece's unresolved crisis raised questions about the region's potential for economic growth, while anti-austerity strikes across southern Europe added to concerns that fiscal reforms would be politically difficult to implement.
(Editing by Bernadette Baum)
Most Popular Slideshows
- NFL MNF: Pittsburgh Steelers 30, Houston Texans 23 [PHOTOS]
- 2014 MLB World Series Game 1: San Francisco Giants 7, Kansas City Royals 1 [PHOTOS]
- 2014 MLB World Series - Game 2: Kansas City Royals 7, San Francisco Giants 2 [PHOTOS]
- NFL Thursday Recap - Denver Broncos 35, San Diego Chargers 21: Peyton Manning Has 3 TDs In Easy Win [PHOTOS]
Join the Conversation
- Xiaomi Redmi 1S vs. Sharp Aquos Crystal – Specifications, Features And Price Showdown
- ASUS Releases A Teaser Indicating The Arrival of New Zenfone and ZenWatch On October 28
- Boy Stoned To Death For Alleged Rape, Victim Receives Dowry From Militants
- Three Dual SIM Samsung Galaxy Note 4 Duos Variants Comes To China
- Russia is Creating Underwater Combat Robots to Protect its Arctic Territories
- ‘Lone Wolf’ Attack on Canada Parliament Hill Could be ISIS-Related
- Android Lollipop 5.0 Confirmed for Nov 3 Rollout as Nexus 6 Global Release Date is Delayed – Reports