By Victor Reklaitis, MarketWatch
NEW YORK (MarketWatch) -- U.S. stocks ended lower on Tuesday,
with the S&P 500 retreating from the previous session's record
close and halting a two-session winning streak.
With no major economic data on the calendar, investors tracked
U.S. budget talks and continued to weigh whether a reduction in
bond buying will come at next week's Federal Reserve meeting. Mixed
economic reports out of China also provided an uncertain
backdrop.
The S&P 500(SPX) fell 5.75 points, or 0.3%, to close at
1,802.62. The Dow Jones Industrial Average (DJI) shed 52.40 points,
or 0.3%, to finish at 15,973.13, while the Nasdaq Composite (RIXF)
lost 8.26 points, or 0.2%, to 4,060.49, as those two indexes also
snapped two-day winning streaks. The Dow closed below its milestone
level of 16,000 after finishing above it on Monday and Friday.
Bruce Bittles, chief investment strategist at Robert W. Baird
& Co., said tax-related selling could weigh on the market in
early December, before stocks experience their usual late-December
rally.
Bittles said the potential for a tapering of the central bank's
bond-buying program "may still keep the market on edge" -- but
perhaps shouldn't.
"How many times can you discount the same news?" Bittles said.
"I think it's already built into the market."
Mark Luschini, chief investment strategist at Janney Montgomery
Scott, said investors are most focused on two items: an emerging
Washington budget deal, which faces a Dec. 13 deadline, and the
Fed's policy-setting meeting on Dec. 17-18. The market has grown
more accustomed to taper news, but there will still be some
near-term repercussions, he told MarketWatch.
"There is still an element of sensitivity to it," Luschini said
on Tuesday.
* The buzz: Muted action might be all that we get this month
given the holiday season. "The market malaise will probably linger
through the rest of the month, with the possible exception of next
week's Federal Reserve meeting," wrote MarketWatch's Shawn Langlois
in the latest Need To Know column.
* Today's movers & shakers: Lululemon Athletica Inc. lost
1.7% after the athletic clothing retailer named a new CEO and said
founder Chip Wilson will resign as chairman. Toll Brothers Inc.
fell 0.7% after paring gains that came following the home builder's
better-than-expected quarterly earnings. Read more in the Movers
& Shakers column.
* Today's economic news: A small-business optimism index rose
0.9 points to 92.5 in November. Separately, the Labor Department
said job openings at U.S. workplaces rose to 3.93 million in
October. None of Tuesday's economic headlines had been expected to
be as significant as Friday's upbeat jobs report or next week's Fed
meeting, where the central bank may decide to reduce its
bond-buying program that has boosted equities.
* Other markets: Asian stocks closed lower after China reported
a slowdown in industrial production, though retail sales came in
higher than forecast. European equities ended lower. Gold closed
sharply higher, while oil prices gained. The dollar dropped against
other major currencies.
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