* S&P 500 falls nearly 4 pct in the past five trading days
* Cisco earnings beat expectations; shares jump
* Dow down 0.7 pct, S&P 500 off 0.6 pct, Nasdaq off 0.4 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, driving its shares up 5.8
percent to $17.83. But the positive momentum was short-lived.
"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
"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 was down 83.26
points, or 0.65 percent, at 12,672.92. The Standard & Poor's 500
Index was down 7.61 points, or 0.55 percent, at 1,366.92.
The Nasdaq Composite Index 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
and others. It was the worst-performing sector on Tuesday.
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 rose 1.8 percent to $11.46 after posting
earnings that beat expectations.
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
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
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 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.