* Cisco earnings beat expectations; shares jump
* Indexes down: Dow 0.4 pct, S&P 0.4 pct, Nasdaq 0.1 pct
By Angela Moon
NEW YORK, Nov 14 U.S. 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 reported first-quarter earnings and revenue
late Tuesday that beat expectations, sending its shares up 6.7
percent to $17.98. But the positive momentum was short-lived.
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 was down 51.30
points, or 0.40 percent, at 12,704.88. The Standard & Poor's 500
Index was down 4.94 points, or 0.36 percent, at 1,369.59.
The Nasdaq Composite Index 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
and others. It was the worst-performing sector on Tuesday.
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 rose 2.3 percent to $11.51 after
posting earnings that beat expectations.
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 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.