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Markets failed to sustain the morning’s gains as a late sell off in Microsoft’s shares and investors’ apprehensions about the fiscal cliff dragged benchmarks into the red. The initial gains were propelled by better-than-expected quarterly results from Home Depot. Meanwhile, Euro zone’s finance ministers and International Monetary fund officials met in Brussels, where they failed to reach any conclusion on Greece’s economic woes. The technology sector was the biggest loser among the S&P 500’s industry groups.
   
The Dow Jones Industrial Average (DJI) dropped 0.5% to close the day at 12,756.18. The Standard & Poor 500 (S&P500) was down 0.4% to finish yesterday’s trading session at 1,374.53. The tech-laden Nasdaq Composite Index tumbled 0.7% to end at 2,883.89. The fear-gauge CBOE Volatility Index (VIX) dropped 0.2% to settle at 16.65. Consolidated volumes on the New York Stock Exchange, American Stock Exchange and Nasdaq were roughly 6.2 billion shares, lower than the year-ago daily average of 6.52 billion shares. Declining stocks easily outpaced the advancers on the NYSE; as for 66% stocks that fell, only 31% stocks moved higher.

Markets opened in the red but had entered the green for a while following better-than-expected quarterly results from The Home Depot, Inc. (NYSE:HD). The company’s shares surged 3.6% after quarterly profits outpaced the Street’s estimates. Shares jumped to their highest level since April 2000.

Meanwhile, investors’ apprehensions about a timely solution to the fiscal cliff issue continued to affect the markets.  President Barack Obama met labor and civic leaders on Tuesday to discuss the situation. After the meeting, labor union leaders said President Obama emphasized that rich Americans will have to pay more tax while rates for U.S. middle class families will decline. Labor leaders are also planning to pressurize Republicans so that they agree to Obama’s plans.    

Richard Trumka, President of The American Federation of Labor and Congress of Industrial Organizations (AFL-CIO), said: “We are very, very committed to making sure that the middle class and workers don’t end up paying the tab for a party that we didn’t get to go to and the president is committed to that as well”. Obama will meet business executives on Wednesday, and will meet top Republican and Democratic leaders on Friday at the White House.   

On the international front, International Monetary Fund (IMF) officials met Eurozone finance ministers in Brussels to discuss the Eurozone debt crisis. IMF chief Christine Lagarde said Greece should reduce its debt to GDP ratio to 120% by 2020. However, Eurozone finance minister said Greece should be given two extra years to reduce its debt burden. According to Eurozone finance Minister Jean-Claude Juncker, IMF and Eurozone finance ministers will meet again on November 20, where they will decide whether the time limit for Greece to reduce its debt burden will be changed to 2022. Meanwhile, Eurozone finance ministers postponed the much needed $40 billion installment of Greece’s bailout loan.

Benchmarks’ drop into the red was also due to a sell off in Microsoft Corporation’s (NASDAQ:MSFT) shares. Shares tumbled 3.2% following the exit of Steven Sinofsky, who was heading the Microsoft windows division. The technology SPDR (XLK) fell 0.5% and was the major loser among S&P 500 industry groups. Stocks such as Hewlett-Packard Company (NYSE:HPQ), International Business Machines Corp. (NYSE:IBM), Oracle Corporation (NASDAQ:ORCL) and Adobe Systems Incorporated (NASDAQ:ADBE) lost 2.0%, 0.5%, 0.9% and 0.5%, respectively.

After suffering back-to-back losses, the utilities sector finished in the green and was the major gainer among S&P 500’s industry groups. The Utilities SPDR (XLU) surged 0.4%. Stocks such as Duke Energy Corp (NYSE:DUK), The Southern Company (NYSE:SO), NextEra Energy, Inc. (NYSE:NEE), TECO Energy, Inc. (NYSE:TE) and PPL Corporation (NYSE:PPL) rose 0.9%, 0.9%, 0.5%, 0.2% and 0.2%, respectively.
 

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