Stocks Slip in Early Trading

Despite Lennar Corp. (NYSE: LEN) reporting 42% jump in quarterly revenue, emphasizing strong recovery in the housing market, U.S. stocks edged lower during early trade on Tuesday as simmering concerns over debt ceiling issue and jitters ahead of quarterly results from banking giants, kept sentiment subdued.

At last check, the Dow Jones Industrial Average Index fell 0.18%; the NASDAQ Composite Index edged down 0.67% while the S&P 500 Index lost 0.36%.

On U.S. economic data front, retail sales rose 0.5% in December, according to the Commerce Department, beating economists’ consensus estimate of 0.2% rise. Overall retail sales climbed 5.2% in 2012.

A separate data provided by the New York Federal Reserve showed that Empire State Index, a gauge on manufacturing activities in New York, stood at minus 7.8 in January. A reading below 0 suggests contraction in manufacturing activities. The Index has now contracted for six successive months in January.

The Producer Price Index (PPI) fell 0.2% in December, according to the Labor Department. Economists polled by Reuters were expecting a 0.1% drop. PPI has now slipped for third straight month.

America’s leading homebuilder in term of market value, Lennar reported better-than-expected fiscal fourth-quarter results, thanks to combination of various factors such as low mortgage rates, shrinking availability of existing homes, rising rentals which prompted Americans to own new homes. Revenue for the period climbed 42% while new order jumped 32%.

Shares of Dell Inc. (NASDAQ: DELL) extended gains on Tuesday after Bloomberg reported that beleaguered computer manufacturer was in talks to make company private. Sales of desktops and laptops have been dwindling as more and more users opt for smartphones and tablets.

Credit rating agency Fitch warned the U.S. that its sovereign debt rating risks being downgraded in case lawmakers in Washington fail to resolve the debt ceiling issue in “timely manner”.

Goldman Sachs (NYSE: GS) and JP Morgan Chase (NYSE: JPM) will report earnings on Wednesday while Bank of America (NYSE: BAC)  and Citigroup (NYSE: C) will announce quarterly results on Thursday.

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Post Written By: Ed Liston Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.