Wall Street slips on angst about "fiscal cliff" and Europe
By Angela Moon | November 15, 2012 5:14 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
"Again today, the market started off hoping for an optimistic tone out of Washington on the 'fiscal cliff' issue, which spurred a move higher. But then, we got nothing and gains basically fizzled out. We are probably going to have many more days like this," said Randy Frederick, managing director of trading and derivatives at Charles Schwab's Center for Financial Research.
"It's been very hard recently to be optimistic about anything and to have a real buying interest."
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.
The Dow Jones industrial average <.DJI> was down 83.26 points, or 0.65 percent, at 12,672.92. The Standard & Poor's 500 Index <.SPX> was down 7.61 points, or 0.55 percent, at 1,366.92. The Nasdaq Composite Index <.IXIC> was down 10.90 points, or 0.38 percent, at 2,872.99.
"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, an analyst at PrinceRidge Group, in New York.
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
In earnings news, Abercrombie & Fitch Co soared 27.8 percent to $39.85 after reporting a steep rise in its quarterly profit and a full-year forecast that beat analysts' estimates. Staples Inc
Abercrombie, Cisco and Staples ranked as the S&P 500's top three percentage gainers.
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 mandated tax hikes and spending cuts that start to take effect next year.
Analysts say serious fiscal negotiations are still weeks away, but Congress' failure to reach a deal could tip the world's largest economy into recession.
Retail sales fell 0.3 percent in October, hurt by the impact of Superstorm Sandy in the U.S. Northeast. The drop was slightly more than expected, but stocks barely reacted to the data. The overall U.S. Producer Price Index fell 0.2 percent in October, contrary to economists' consensus forecast for a gain of 0.2 percent.
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.
The FTSEurofirst-300 index of European shares <.FTEU3> lost 1 percent 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 Jan Paschal)
Join the Conversation
- Russia Is Ready for Shooting War, Will Likely Win Looming Nuclear Showdown with U.S. – Report
- Microsoft Band Runs Out Of Stock, But Offers $10 Gift Voucher To Wait-Listed Customers
- Google Joins Forces with GoPro Inc with New Google Maps Focusing on Destination
- Target Early Black Friday 2014 Sale Ad Released For Nov. 26, 2014 Includes Deals On Toys, HDTVs And Video Games Such As ‘FIFA 15’ And ‘NHL 15’ For Xbox 360 [WATCH VIDEO]
- 16GB iPhone 6 for $99 at Sam’s Club is the Best 2014 Black Friday Deal Around
- Lumia Update Will Come Soon Confirms Microsoft
- Nuclear War: Putin Certain To Launch Battle To Avoid Corruption Charges, Whistleblower Claims