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Stocks slide after gloomy report on retail sales

Steve Rothwell, AP Business Writer

FILE - In this Nov. 7, 2012, file photo, James Dresch of MND Partners Inc. works on the floor of the New York Stock Exchange in New York. Wall Street also appeared headed for gains on the open Wednesday Nov. 14, 2012 as renewed efforts got under way in Washington to resolve the impending "fiscal cliff." (AP Photo/Henny Ray Abrams, File)

NEW YORK (AP) -- Stock indexes moved lower in light trading on Wall Street Wednesday. Strong earnings from Abercrombie & Fitch were offset by a gloomy report on retail spending from the government.

The Dow Jones industrial average was down 56 points at 12,692 shortly after noon. The Standard & Poor's 500 index slipped four points to 1,370 and the Nasdaq composite was down four points at 2,879.

Abercrombie & Fitch, the purveyor of apparel to teenagers, was among the standout stocks. Abercrombie jumped $8.76 to $39.94 after reporting that its international business was thriving and that its net income soared 40 percent in the most recent quarter, more than analysts were expecting.

The strong results from Abercrombie were tempered by a report from the Commerce Department saying that Americans cut back on spending in October, suggesting that many are still cautious about the economy.

Sales dropped 0.3 percent last month after three months of gains. That's worse than analysts had been expecting, according to FactSet. The government also said auto sales fell 1.5 percent, the most in more than a year. Sales may have been hurt by Superstorm Sandy.

Investors will be closely watching a press briefing later Wednesday by President Barack Obama.

Stocks were roiled in the immediate aftermath of last week's presidential election on concern that the U.S. will fall over the "fiscal cliff." Unless lawmakers hammer out a deal to cut the budget deficit by Jan. 1, a series of tax increases and revenue cuts will be implemented that will likely push the U.S. back into recession.

"Investors' hopes that the election would end uncertainty remain unfulfilled," said Lawrence Creatura, a portfolio manager at Federated Investors in Rochester, New York. "Investors are still grasping for visibility....it's very tough to determine what happens next."

The S&P 500 has slipped 3.7 percent since Obama won re-election Nov. 6, and has dropped 6.5 percent from Sept. 14, when it hit the highest point of the year. Stocks had risen over the summer before the Federal Reserve announced Sept. 13 that it would extend its so-called quantitative easing program by mortgage-backed securities with the intention of holding down borrowing costs.

Market participants are also awaiting the release of minutes from the Federal Reserve's October meeting on Thursday for more insight into how the U.S. economy is doing. The notes are scheduled to be released at 2 p.m. Eastern.

The yield on the 10-year Treasury note rose to 1.61 percent from 1.59 percent.

Among other stocks making big moves:

Cisco Systems, the world's largest maker of computer networking equipment, gained $1.05 to $17.89. Cisco said late Tuesday that its earnings rose 18 percent in the latest quarter and that U.S. companies are starting to spend again.

Mosaic, a company that mines for potash, a key ingredient in fertilizers, slipped $1.92 to $48.82 after saying that international demand for its product had weakened and that it was lowering its sales forecasts.

Advanced Micro Devices, a chipmaker, slumped 11 cents, or 5.3 percent, to $1.98 after the company denied a report that said it was considering a sale. The stock has lost about 76 percent of its value since reaching a 52-week high of $8.35 in March as the company's sales dwindled as consumers shift away from PCs to tablets and smartphones.