--Stocks fall, reversing midday gains
--Europe ticks higher, despite Greek debt solution delay; German
economic expectations index declines
--Home Depot leads blue chips on better outlook; Microsoft
slides
By Matt Jarzemsky
NEW YORK--U.S. stocks fell to a more than three-month low as
concerns about the fiscal cliff and Greece's debt woes outweighed
optimism about Home Depot's better-than-expected earnings
report.
The Dow Jones Industrial Average added fell 58.90 points, or
0.5%, to 12756.18. The benchmark reversed intraday gains of as much
as 83 points to finish at its lowest level since July 25.
The Standard & Poor's 500-stock index slipped 5.50 points,
or 0.4%, to 1374.53. Technology and financial shares led the
decline. The tech-heavy Nasdaq Composite Index slid 20.37 points,
or 0.7%, to end at 2883.89.
Microsoft dropped after news that Steven Sinofsky, head of the
software maker's Windows business, is leaving the company.
Home Depot added 3.6% to close at a 12-year high after raising
its 2012 earnings forecast on an improving housing market.
"It seemed like the news out of the housing sector had a
positive impact on the market, but then ultimately, the set of
issues that have had a negative impact of late--namely the fiscal
cliff--weighed on stocks into the close," said Cameron Hinds,
regional chief investment officer of Wells Fargo Private Bank,
which oversees $170 billion.
The so-called fiscal cliff, a combination of mandatory tax
increases and spending cuts, is set to take effect at the start of
next year if U.S. politicians can't reach a budget deal to avoid
it. White House and congressional aides are expected to kick off
negotiations Friday, as President Barack Obama meets with
congressional leaders.
"These types of days are going to be common," Mr. Hinds said.
"Toward the end of the day, the fiscal cliff worries start to take
over."
European markets closed higher, alongside the earlier gains in
U.S. stocks, with the Stoxx Europe 600 adding 0.4%. International
Monetary Fund chief Christine Lagarde and Eurogroup President
Jean-Claude Juncker disagreed on how Greece's debt should be
tackled, weighing on sentiment.
A measure of German economic expectations for November fell well
below economists' expectations, according to the Center for
European Economic Research.
On the U.S. economic front, the National Federation of
Independent Business said its small-business optimism index for
October inched up in September, bucking economists' forecasts for a
decline.
The federal budget deficit widened to $120 billion in October,
the first month of the government's new fiscal year. The deficit
compared with a $98.47 billion shortfall last year and was greater
than economists' forecasts for $113 billion.
Asian markets also fell in response to concern about Greece.
China's Shanghai Composite shed 1.5% and Japan's Nikkei Stock
Average gave up 0.2% to record a seventh consecutive decline.
Crude-oil futures slipped 0.2% to settle at $85.38 a barrel,
while gold futures lost 0.4% to settle at $1,724.20 an ounce. The
dollar gained slightly against the euro but eased versus the
yen.
Elsewhere in the corporate arena, Dick's Sporting Goods gained
4.7% after reporting quarterly results that topped its forecast and
raising its current-year profit target.
Nanosphere gained 2% after the medical-test maker said the U.S.
Food and Drug Administration cleared it to market a new diagnostic
tool.
-Write to Matt Jarzemsky at matthew.jarzemsky@dowjones.com