Stocks dip on debt limit concerns, retail report

3 hrs.

From wire services , NBC News

Stocks opened?lower on Wall Street after the government reported that retail spending rose only modestly between November and December, a critical period for stores.?

The Commerce Department said retail sales rose 0.5 percent in December from November.?

Investors?also?fretted over the debate brewing in Washington over raising the U.S. borrowing limit as well as what is expected to be a lackluster earnings season.?

The Dow Jones industrial average was down 33 points at 13,474 shortly after the opening bell Tuesday. The Standard & Poor's 500 index was off five at 1,465. The Nasdaq composite was down 17 points at 3,100.?

High-end yoga wear maker Lululemon Athletica dropped 7 percent after the company issued a revenue forecast that was below the forecasts of Wall Street analysts.?

RadioShack rose 2 percent after the electronics retailer said it would close down its mobile phone centers in Target stores, an operation that analysts see as a money-loser.?

On Monday, President Barack Obama rejected any negotiations with Republicans over raising the U.S. debt ceiling. The United States could default on its debt if Congress does not increase the borrowing limit.?

Resolving the debt ceiling debate is more a question of how than if. Investors are wary of another last-minute agreement like the one in August 2011, said Rick Meckler, president of investment firm LibertyView Capital Management in Jersey City, New Jersey.?

"Of course people expect the government will not default on its debt ... but there could be damage done in how it's resolved," said Meckler. "A long, dragged out fight over this damages the credibility of the government and can weaken the global market for U.S. debt."?

Speaking separately on Monday, Federal Reserve Chairman Ben Bernanke urged lawmakers to raise the debt ceiling. The central bank chairman also gave a cautiously optimistic outlook for U.S. growth but no clear hints on when the Fed would curb its aggressive bond purchases.?

Corporate earnings season picks up the pace this week and investors are bracing for disappointment. Analyst estimates for the quarter have fallen sharply since October. S&P 500 earnings growth is now seen up just 1.9 percent from a year ago, Thomson Reuters data showed.?

Although the data, on balance, was positive, reaction in the market was likely to be limited with investors' attention on the negotiations over the debt ceiling and spending cuts, said Hugh Johnson, chief investment officer of Hugh Johnson Advisors LLC in Albany, NY.?

"'Fiscal Cliff Two' is now the principle focus of investors," he said.?

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Source: http://www.nbcnews.com/business/stocks-dip-debt-limit-concerns-retail-report-1B7979427

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