US stocks closed lower on Tuesday as worries about Greece’s debt crisis and the US “fiscal cliff” took the shine off strong quarterly results from home-improvement giant Home Depot.
The Dow Jones Industrial Average dropped 58.90 points (0.46 per cent) to 12,756.18.
The broad-market S&P 500 shed 5.50 (0.40 per cent) at 1,374.53, while the tech-rich Nasdaq Composite fell 20.37 (0.70 per cent) to 2,883.89.
After opening lower, stocks clawed back into positive territory but were unable to stay there.
“Gains incurred from upbeat comments about the housing recovery from Dow component Home Depot dissipated in late-day action as the continued anxiety over the looming fiscal cliff and eurozone uncertainty appeared too much for investors to overcome,” Charles Schwab & Co analysts said.
Congress came back from recess on Tuesday with the “fiscal cliff” at the top of the agenda. The dramatic spending cuts and tax increases are mandated to take effect beginning in January if US politicians cannot find a compromise on deficit reduction to avoid them.
Continued delays in providing Greece with the bailout funds it needs to avoid default also kept investors on edge.
Home Depot was the strongest gainer on the blue-chip index, jumping 3.6 per cent after reporting earnings that beat Wall Street estimates and raising its full-year guidance.
“Our third-quarter results were better than we expected and reflected, in part, what we believe is the start of the path toward the healing of the housing market,” said Frank Blake, chairman and chief executive.
Microsoft was the steepest Dow loser, down 3.2 per cent. The software maker announced the departure of Steven Sinofsky, head of its Windows unit, just weeks after the launch of the Windows 8 operating system.
In the luxury sector, Michael Kors Holdings rose 0.9 per cent after posting better-than-expected earnings for the second quarter, while department store chain Saks climbed 0.4 per cent after disappointing results.
Printer and copier maker Xerox rose 1.4 per cent after lowering its profit forecast for the fourth quarter and saying it planned to increase its dividend by 34 per cent next year.
Apple was unchanged at $542.90, after losing more than $150 since late September.
The bond market, which was closed Monday for a federal holiday, rallied. The 10-year US Treasury yield fell to 1.59 per cent from 1.61 per cent late Friday, and the 30-year dropped to 2.72 per cent from 2.75 per cent.
Bond prices and yields move inversely.
