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
Join the Conversation
- Chilling: New ISIS Video Addresses Australia; Aussie Teen Delivers Message
- The Pirate Bay Blockade: Cost Of Blocking Websites Like TPB Is Ridiculously High
- Xiaomi Mi4 And MiPad Prices Likely Slashed, Thanks To Rivals Oppo, OnePlus And Meizu
- Virginia Woman Who Posted Naked Image Of Ex-BF’s New Partner 1st Person Charged Under Revenge Porn Law
- Meizu MX4 Pro To Arrive In November In Black And White Colours, Features Higher Than QHD Display, Exynos 5430 SoC And 3 GB RAM
- No Mercy: ISIS, Father Stones to Death Daughter for Alleged Adultery
- Israel Loses A Friend in UN Security Council As New Zealand Replaces Australia