Stocks: Wednesday review

European stocks fell to a two-month low as industrial production dropped the most in at least three years.

Euro-area industrial production dropped the most in more than three years in September, led by double-digit declines in Portugal and Ireland. Output fell 2.5 percent from August, when it increased 0.9 percent, the European Union’s statistics office in Luxembourg said today. The median economist estimate was for a drop of 2 percent.

In the U.K., jobless claims rose at the fastest pace in more than a year, increasing by 10,100 to 1.58 million in October. The median economist estimate was for no change.

Europe’s budget enforcers proposed easing the pressure on Spain to cut the deficit, backing further away from the austerity-first mantra that has dominated the response to the sovereign-debt crisis.

The European Commission said Spain doesn’t need to compound the budget-cutting pain in 2012 or 2013 and indicated the country would be eligible for a credit line to shore up its public balance sheet.

National benchmark indexes declined in 14 of the 18 western-European markets. France’s CAC 40 slipped 0.9 percent, Germany’s DAX lost 0.9 percent, while the U.K.’s FTSE 100 fell 1.1 percent.

ICAP tumbled 9.2 percent to 281.4 pence after the company reported a 26 percent decline in fiscal first-half pretax profit to 137 million pounds ($217 million) as the sovereign-debt crisis hurt trading. The company also said full-year profit would be at the “low end” of the 300 million-pound to 332 million-pound range forecast by analysts.

Monti Paschi fell 5.1 percent to 20.1 euro cents after Italy’s third-biggest bank unexpectedly reported a third-quarter loss of 47.4 million euros as provisions for bad loans almost doubled. The average analyst estimate was for net income of 103.4 million euros.

Vivendi SA jumped 4.7 percent to 15.69 euros after the company said earnings will fall less than expected this year, helped by cost cuts and demand for video games. The owner of record company Universal Music Group also reported that adjusted third-quarter profit declined 2.9 percent to 665 million euros, beating the average analyst estimate of 598 million euros.

Infineon Technologies AG climbed 5.9 percent to 5.55 euros after Europe’s second-biggest semiconductor maker said it plans to reduce spending next year after fourth-quarter sales and operating profit topped analysts’ estimates.

Session started indices above zero, but stay in positive territory failed.

The morning was the result of the growth of futures strong quarterly report Cisco (CSCO) and data that registered a decline in inflationary pressures in the U.S.. However, it was not enough to continue the growth indices, especially in comparison with other negative news.

Markets are in a state of nervousness on the issue of "fiscal cliff" in the United States. Now each investor oversees the process of addressing this issue. The focus of market participants is now not on the corporate reports, namely, the problem of "fiscal cliff" and the associated uncertainty, which defines the situation in the markets.

Any updates on progress in addressing this issue could support the stock indices. Important negotiations on the reduction of tax benefits should go on Friday, when Obama will hold talks with the leaders of the Democratic and Republican parties.

According to published statistics, retail sales in October fell by 0.3%, while the expected decrease of 0.2%, while the previous month was an increase of 1.1%, and the change with a minus sign was recorded for the first time in 4 months.

The published minutes of the Fed almost no impact, given the fact that they did not have nothing that the market already knew. Fed officials generally gave positive assessments of the last step of buying bonds at a meeting last month. However, managers are still differences of opinion as to whether to implement a program of bond purchases in the coming year.

All components of the index DOW, except one, have fallen in price. Maximum loss suffered shares Bank of America (BAC, -3.64%). Growth could show only stock Cisco Systems (CSCO, +4.81%), which are due to a strong quarterly report today renewed a maximum of November.

All sectors of the S & P is in the red. Maximum loss showed sectors of conglomerates (-2.3%) and consumer goods (-2.3%).

Youth clothing retailer Abercrombie & Fitch soared by 34.5% as against the published statements - income was $ 71.5 million, or 87 cents per share, compared with $ 50.9 million, or 57 cents a year earlier paper with an average forecast of Wall Street at 59 cents.

At the close:

Dow 12,570.95 -185.23 -1.45%

Nasdaq 2,846.81 -37.08 -1.29%