US stocks slip on fiscal cliff woes

Nov 14 2012, 04:16 IST
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SummaryThe Dow Jones industrial average was down 58.90 points at 12,756.18.

US stocks closing: World stocks fell on Tuesday, extending losses as U.S. stocks reversed gains on worries that the United States could fall back into recession due to looming spending cuts and tax rises if Congress does not act, and the euro weakened as Greece faced delays in winning more aid.

The euro hit a more than two-month low against the dollar and a one-month trough versus the yen on concern about the delays in aid for debt-burdened Greece and on uncertainty about whether Spain will seek a bailout.

Worries about Greece and Spain have caused the euro to lose value against the safe-haven dollar in seven of the last nine trading sessions. So far in November, the euro has fallen 1.9 percent against the dollar and 1.7 percent against the yen.

In late trading, the euro was slightly lower at $1.2704, after earlier trading as low as $1.2660, its lowest level since Sept. 7.

Greece's international lenders gave the country more time to fix its budget, though they did not disburse the aid Greece had hoped to use to refinance 5 billion euros of its debt by Friday.

A public clash between Greece's international lenders over how Athens can bring its debts down to a sustainable level has fueled fears that Europe's troubles could flare up anew.

When those overseeing resolution to the euro zone crisis continue to disagree, it becomes very difficult to instill confidence in investors, said Sean Cotton, foreign exchange adviser at Bank of the West in San Ramon, California.

On Wall Street, equities sold off late in the session, led by a slide in Microsoft, although retailers were a notable bright spot after Home Depot, the world's largest home improvement chain, raised its outlook.

Stocks opened with a boost of upside energy, but when there was no follow-through by late morning, players just took some chips off the table to wait for tomorrow's retail sales figures and any developments in the fiscal cliff negotiations, said John Canavan, market analyst at Stone & McCarthy Research Associates in Princeton, New Jersey.

The market is grappling with how a divided U.S. Congress will deal with the series of mandated tax hikes and spending cuts that start to take effect next year and could take the world's largest economy back into recession. However, serious negotiations are still weeks away, analysts said.

The Dow Jones industrial average was down 58.90 points, or 0.46 percent, at 12,756.18. The Standard & Poor's

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