Wall Street stocks fell at the start of trading Tuesday, but later managed small gains, after international lenders clashed over help for Greece and investor concern grew over how a lack of agreement in Congress could hurt the nation’s economy.
Equities have been pressured in recent sessions by worries over a series of stringent budget cuts and tax increases that are scheduled to take effect in the new year. Market participants are concerned that if no deal is reached to modify the changes, the economy could fall back into recession.
In afternoon trading, the Standard & Poor’s 500-stock index added 0.2 percent to about 1,383 points, the Dow Jones industrial average rose 0.2 percent to about 12,842, and the Nasdaq composite index was 0.2 percent lower.
Concerns over the fiscal discussions contributed to the S.&P. 500’s losses last week, the worst week for the index since June. On Monday, the index ended up only by 0.1 percent, off its highs of the session.
“Stocks will be stuck where they are until we get some kind of resolution on this, and if we don’t get something done, people will be even more disenchanted with equities than they are now,” said Art Hogan, managing director of Lazard Capital Markets in New York.
American lawmakers return to the Capitol Tuesday with a seven-week deadline to reach agreement over the budget and taxes, and while most analysts expect some kind of deal will be forged, concerns remained. Barclays on Tuesday cut its year-end target for the S.&P. 500 to 1,325 points from 1,395, saying there was “little basis to believe a grand compromise is in the offing.”
Home Depot, the home improvement retailer, rose 4 percent after it reported earnings that beat expectations and raised its outlook.
“Home Depot has two things going for it — an improvement in the housing sector and the rebuilding efforts after Hurricane Sandy,” Mr. Hogan said. “That’s a backdrop where the company is very well positioned.”
The euro started weaker after euro zone finance ministers said Greece should be given until 2022 to meet a goal for reducing its debt mountain to a more manageable level, but Christine Lagarde, chief of the International Monetary Fund, insisted the existing target of 2020 should stay.
Behind the differences was a debate over whether euro zone governments should write off some of their Greek debt holdings to help Athens, an idea that Germany opposes.
European stocks closed higher. The DAX in Germany added less than a point, and the CAC 40 in France gained 0.6 percent. The FTSE 100 in Britain added 0.3 percent.
The S.&P. 500 was still up about 10 percent for 2012, despite losses in recent weeks. The Nasdaq has fallen for five straight weeks.
Stocks closed little changed Monday, with investors limiting bets ahead of the negotiations in Washington. Volume was light, with the bond market and government offices closed for Veterans Day.
Wall Street Moves Higher
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Wall Street Moves Higher
