Dec. 26 - Summary of business headlines: Holiday spending much less than expected, retail stocks drag U.S. stocks lower, Starbucks' message on a cup to Congress; Better than expected home prices. Carmen Roberts reports.
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The luster dims on Christmas, after consumers spend less than expected on gifts this year. That sends retail stocks lower, dragging U.S. stocks with them. The major benchmark indexes fell for a third straight day. And retail stocks, including Coach, Wal-Mart and Amazon avoided a Christmas bounce and fell for the day.
Analysts expected holiday sales to rise 2-to-3 percent, but they only inched up 0.7 percent, according to MasterCard Advisors SpendingPulse. The chief economist for International Council of Shopping Centers says bad weather and Hurricane Sandy devastation kept some shoppers at home. Michael Niemira says another big concern was the fiscal cliff.
SOUNDBITE: MICHAEL NIEMIRA, CHIEF ECONOMIST, INTERNATIONAL COUNCIL OF SHOPPING CENTERS (ICSC), (ENGLISH) SAYING:
"That's sort of the backdrop to the holiday season, and it certainly has affected consumer confidence. Bernanke, the Fed Chairman has indicated that in his comments. So we have had some impact from that and it lingers."
President Obama and Congress will be back in Washington Thursday to restart negotiations on avoiding the fiscal cliff's $600 billion of spending cuts and tax increases.
Starbucks is taking on the fiscal cliff with messages on its coffee cups. The company is urging employees in the Washington area to write "come together" on customers' cups Thursday and Friday to encourage lawmakers find a solution.
While Washington struggles, Americans are finding good news at home. The price of homes jumped in 4.3 percent in October compared to a year ago. The better-than-expected gains underscore views the U.S. real estate market is on the mend and will help support the economy.
Wall Street volume was light in this Christmas-shortened trading week, and major European markets were closed for the holidays.