NEW YORK: U.S. stocks fell Tuesday, halting a two-day gain in the Standard & Poor’s 500 index, as concern about the federal budget debate erased a rally led by Home Depot Inc.
Microsoft Corp. slipped 3.2 percent after saying its Windows president is departing. AK Steel Holding Corp. tumbled 18 percent as it forecast a wider-than-anticipated fourth-quarter loss with a decline in prices for the last three months of the year. Home Depot, the largest U.S. home improvement retailer, rallied 3.6 percent after profit beat estimates.
The Standard & Poor’s 500 Index dropped 0.4 percent to 1,374.53 after rallying as much as 0.6 percent earlier in the day. The Dow Jones industrial average decreased 58.90 points, or 0.5 percent, to 12,756.18.
“The stock market is going to be captive to Washington for the time being,” Michael Mullaney, who helps manage $9.5 billion as chief investment officer at Fiduciary Trust in Boston, said in a phone interview. “The market would like to go up a little bit from here after it has been beaten down, but it’s going to be hard pressed to sustain a rallying state until we have resolution on the fiscal cliff.”
President Barack Obama is meeting with labor leaders today and business executives such as David Cote of Honeywell International Inc., Alan Mulally of Ford Motor Co., and Kenneth Chenault of American Express Co. on Thursday. He’s trying to build support for extending middle-class tax cuts now and designing a “balanced” approach that relies on spending cuts and tax increases that would require immediate concessions from Republicans.
Stocks rose earlier after Spanish 10-year bonds reversed a decline, leaving the yield on the securities 0.04 percent lower at 5.85 percent as European policy makers worked to alleviate the region’s debt crisis.
Microsoft retreated 3.2 percent, the most in the Dow, to $27.09. Windows President Steven Sinofsky is departing, while Julie Larson-Green will take charge of all software and hardware related to the flagship operating system.
AK Steel fell 18 percent to $4.50. The supplier of metal to U.S. automotive and construction customers said average steel selling prices will be down 5 percent compared with the third quarter in part because of worsening global business conditions. Lower raw-material costs won’t fully make up for the decline in prices, it said.
Weatherford International Ltd. lost 16 percent to $9.15. The world’s fourth-largest oilfield-services provider reported third-quarter revenue of $3.82 billion, less than the $3.9 billion estimate compiled by Bloomberg.
Big Lots Inc. slumped 5 percent, the biggest decline in the S&P 500, to $27.48. The discount chain was cut to sell from hold by Deutsche Bank analyst Charles Grom.