Wall Street eyes the "cliff" after six days of gains

NEW YORK (Reuters) - Stocks retreated after six days of gains on Thursday as encouraging reports on retail sales and jobless claims were outweighed by the uncertainty surrounding the "fiscal cliff" negotiations in Washington.

Drawn-out fiscal negotiations between Democrats and Republicans have constrained trading. There is concern that tax hikes and spending cuts set to begin in 2013 if a deal is not reached in Washington will hurt growth, but overall, the stock market has taken it in stride.

Republican House Speaker John Boehner on Thursday accused President Barack Obama of "slow-walking" the economy off the fiscal cliff.

"Today's there's a certain sense that both sides are still apart," said Gordon Charlop, managing director at Rosenblatt Securities in New York, describing Thursday's trading as "tweaking" while investors watch Washington's back-and-forth drama.

"I think it's imperative they cooperate on some levels, and if they do, I think we'll see a Santa Claus rally."

The S&P 500 managed gains for six straight sessions and touched its highest level since October 22 on Wednesday.

Best Buy Co shares shot up 15.4 percent to $14.05 after a report that the company's founder is expected to offer to buy the consumer electronics retailer by the end of the week. The shares hit an intraday high at $14.48 - up 18.8 percent.

Weekly claims for jobless benefits dropped to nearly the lowest level since February 2008 and retail sales rose in November after an October decline, improving the picture for consumer spending.

The Dow Jones industrial average <.dji> lost 50.86 points, or 0.38 percent, to 13,194.59. The Standard & Poor's 500 Index <.spx> slid 7.80 points, or 0.55 percent, to 1,420.68. The Nasdaq Composite Index <.ixic> fell 20.67 points, or 0.69 percent, to 2,990.14.

A day after the Federal Reserve announced a new round of stimulus for the economy, markets focused on Chairman Ben Bernanke's reiteration that monetary policy would not be sufficient to offset the impact of going over the fiscal cliff.

The S&P energy index <.gspe> slid 1 percent as Nabors Industries Ltd dropped 5.4 percent to $13.75 after Jefferies cut the drilling company's stock to "underperform" from "hold," and shares of U.S. refining company Phillips 66 lost 3.1 percent to $51.42.

European Union finance ministers reached agreement to make the European Central Bank the bloc's top banking supervisor, which could boost confidence in EU leaders' ability to confront the euro zone's sovereign debt crisis.

CVS Caremark Corp shares gained 2 percent to $48.48 after saying it expects higher earnings in 2013.

(Editing by Kenneth Barry and Jan Paschal)

Source: http://news.yahoo.com/stock-index-futures-point-flat-lower-start-100008552--finance.html

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