Stocks End Lower on Sen. Reid's 'Cliff' Remarks
Stocks closed near session lows in volatile trading Tuesday, with the S&P 500 breaking below 1,400, following Senate Majority Leader Harry Reid's comments that he is disappointed with the little progress made in the recent debt talks.
Reid's comments echoed Senator Dick Durbin's cautious statement over the weekend.
Stocks were volatile for most of the session as investors juggled worries over the "fiscal cliff" against a batch of positive economic reports and optimism over the Greek deal.
The CBOE Volatility Index, widely considered the best gauge of fear in the market, traded above 15.
Most key S&P sectors finished in negative territory, led by banks and energy. Utilities closed higher for a second-straight session.
"Consumer and investors alike are concerned about the fiscal cliff," said David Kudla, CEO and chief investment strategist at Mainstay Capital Management. "Market is going to suffer from headline risk until we get to that deal."
Investors were focused on politicians' efforts to resolve the $600 billion "fiscal cliff" of automatic tax hikes and spending cuts due to hit the U.S. economy at the end of the year. Negotiations are expected to resume this week as policymakers return to Washington from the Thanksgiving holiday.
European shares were higher after Greece's international creditors secured a deal to reduce the troubled nation's debt by 40 billion euros ($51.9 billion) and changed the debt target for the country to 124 percent of gross domestic product (GDP) by 2020, from 120 percent previously.
"Nothing else matters—everyone is focused on the resolution of the fiscal cliff," said John Fox, co-manager of the FAM Value Fund. "Stocks will most likely muddle through until we come to some solution."
Facebook rose to hit a four-month high after Nomura boosted its price target on the social-networking giant to $32 from $27 a share.
Yelp gained after Cantor Fitzgerald raised its rating on the business review site to "buy."
In a quiet day for earnings, home security firm ADT posted better-than-expected earnings and said its board approved a $2 billion share repurchasing program over three years.
Corning rallied after the glass manufacturer said it sees stronger-than-expected fourth-quarter LCD glass volume and full-year sales of its gorilla glass approaching $1 billion, thanks to robust demand for LCD televisions and other consumer electronic devices in North America and China.
On the economic front, home prices rose for the sixth-consecutive month in September, according to the S&P/Case-Shiller home price index. Meanwhile, consumer confidence rose to its highest level in 4-1/2 years in November, according to the Conference Board.
And durable goods were unchanged in October, according to the Commerce Department.
The government auctioned $35 billion in 2-year notes at a high yield of 0.27 percent. The bid-to-cover was 4.07.
—By CNBC's JeeYeon Park (Follow JeeYeon on Twitter: @JeeYeonParkCNBC)
Coming Up This Week:
WEDNESDAY: Weekly mortgage apps, new home sales, oil inventories, 5-yr note auction, Fed's Beige Book, Microsoft shareholders mtg; Earnings from Ann, Express, Aeropostale, La-Z-Boy, TiVo
THURSDAY: GDP, jobless claims, corporate profits, pending home sales, 7-yr note auction, chain-store sales; Earnings from Kroger, Tiffany, Barnes & Noble
FRIDAY: Personal income & outlays, Chicago PMI, farm prices
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