Wall Street slips on cliff caution, but homebuilders shine
By Rodrigo Campos | November 28, 2012 7:00 AM EST
Stocks declined on Tuesday as wrangling continued in Washington over budget talks, while homebuilders' stocks outperformed the broader market after positive data.
Strengthening the case for a sustained rebound in housing, single-family home prices rose for an eighth straight month in September. The PHLX housing sector index <.HGX> advanced 0.5 percent, with all but one of its 19 components posting gains.
"As long as you have interest rates as low as they are right now, housing is definitely back," said Brian Amidei, managing director at HighTower Advisors in Palm Desert, California.
Despite strong housing data, an increase in planned business spending and a more than 4-year high in consumer sentiment, traders were cautious as politicians in Washington made little progress in dealing with the "fiscal cliff."
Markets have lately focused on whether Congress and the White House can agree on ways to avoid some $600 billion in automatic spending cuts and tax increases that are due to kick in early next year.
"If there's any reason why the (stock) market has stalled out, it's because large investors have decided to step back and see this play out, because I think they're very aware of how important this is," said Hugh Johnson, chief investment officer of Hugh Johnson Advisors LLC in Albany, New York.
The Dow Jones industrial average <.DJI> fell 74.53 points, or 0.57 percent, to 12,892.84. The S&P 500 Index <.SPX> dropped 5.68 points, or 0.40 percent, to 1,400.61. The Nasdaq Composite Index <.IXIC> shed 4.80 points, or 0.16 percent, to 2,971.98.
The S&P 500 was holding at 1,400, a key psychological level it reclaimed last week. Last week, the S&P 500 gained nearly 4 percent.
As budget talks linger, Las Vegas Sands
Las Vegas Sands jumped 5.5 percent to $46.46. Supertex rose 3.4 percent to $17.41.
Food maker Ralcorp Holdings
McMoRan Exploration Co
(Reporting by Rodrigo Campos; Editibg by Jan Paschal)