* U.S. budget deal gets tentative approval
* Costco shares drop after profit misses estimates
* Twitter briefly touches new high but erases gains
* Indexes down: Dow 0.2 pct; S&P 0.3 pct; Nasdaq 0.3 pct
By Angela Moon
NEW YORK, Dec 11 Wall Street fell modestly on
Wednesday as investors weighed the possibility of a wind-down of
U.S. Federal Reserve stimulus in the wake of a provisional
budget deal reached in Wahington.
The agreement, reached late Tuesday, would end three years
of impasse and fiscal instability in Washington that culminated
in October with a partial government shutdown.
While the deal removes a key uncertainty hanging over
markets, some say it strengthens expectations that the U.S.
central bank may soon scale back its $85 billion-a-month
stimulus that has fueled a stock market rally this year.
"Right now, the market is sort of taking all this in. All
eyes are on any (Fed) tapering in December and while the deal
removes some political uncertainties, it makes tapering more
possible," said Karyn Cavanaugh, market strategist with ING U.S.
Investment Management in New York.
"We didn't have a great start to December but I'm still
expecting a Santa Claus rally and expect to end the year higher
Investors are hesitant to make big bets ahead of the Federal
Reserve policy-making meeting on Dec. 17-18, in the absence of
market-moving economic data.
The Dow Jones industrial average fell 27.33 points,
or 0.17 percent, to 15,945.8, the S&P 500 lost 5.04
points, or 0.28 percent, to 1,797.58 and the Nasdaq Composite
dropped 11.343 points, or 0.28 percent, to 4,049.147.
"I still have my eye on the S&P 500 index's 1,800 level,"
said Bryan Sapp, senior trading analyst at Schaeffer's
investment research in a note to clients.
"The market saw support there twice (on Tuesday). Going
forward, though, a failure at this round number could
potentially result in a move down to 1,780 or so, which is last
week's pre-jobs-report low."
In company news, MasterCard Inc raised its quarterly
dividend by 50 cents to $1.10 per share and announced a new $3.5
billion buyback program, sending the stock up 4.6 percent to
$798.47 in early trading.
Twitter shares briefly hit a new high of $52.73
shortly after the open, before retreating to trade down 1.3
percent at $51.30.
Costco Wholesale Corp shares slipped 2.4 percent to
$117.13 after the retailer's first-quarter profit missed Wall
Street estimates due to lower gasoline prices and weak foreign
Mining equipment maker Joy Global Inc forecast 2014
earnings below analysts' estimates after reporting a quarterly
profit that fell short of expectations as miners cut spending.
The stock fell 4 percent to $53.73.
Economic data expected on Wednesday includes the Treasury
Department's monthly budget data for November at 2:00 p.m. EST