* Amazon slumps with retail stocks
* S&P/Case-Shiller data tops expectations
* Obama heads back to Washington after vacation
* Dow off 0.4 pct, S&P 500 down 0.6 pct, Nasdaq off 0.8 pct
NEW YORK, Dec 26 (Reuters) - U.S. stocks fell on Wednesday
as retailers' shares dropped sharply after a report that showed
holiday shoppers were less enthusiastic than last year, with
investors saying worries about the "fiscal cliff" may have kept
them away from stores.
The Morgan Stanley retail index skidded 1.8 percent
as holiday-related sales rose 0.7 percent from Oct. 28 through
Dec. 24, compared with a 2 percent increase last year, according
to data from MasterCard Advisors SpendingPulse. The SPDR S&P
Retail Trust slipped 1.5 percent to 61.24.
Janna Sampson, co-chief investment officer of OakBrook
Investments in Lisle, Illinois, said worries about "fiscal
cliff" tax hikes and spending cuts next year had likely kept
shoppers from a last-minute rush to the stores.
"I think people held back this year, just worried about that
bigger cut out of their paycheck next year and having to tighten
their belt," she said. "If you've got to tighten your belts
starting in January, people start worrying about overspending."
Department stores' stocks slid. Macy's lost 3 percent
to $36.41, while Saks also fell 3 percent and traded at
$10.30, near its session low. Online retailer Amazon.com
fell 3.1 percent to $250.52.
President Barack Obama is due back in Washington early
Thursday for a final effort to negotiate a deal with Congress to
bridge a series of tax increases and government spending cuts
set to begin next week. The president will leave Hawaii later on
Wednesday, arriving in the capital early on Thursday.
The Dow Jones industrial average slipped 45.61
points, or 0.35 percent, to 13,093.47. The Standard & Poor's 500
Index shed 8.66 points, or 0.60 percent, to 1,418. The
Nasdaq Composite Index dropped 23.10 points, or 0.77
percent, to 2,989.50.
Volume was light, with only 1.55 billion shares having
traded at midday on the New York Stock Exchange, the Nasdaq and
the NYSE MKT. Many senior traders were still on vacation during
this holiday-shortened week and major European markets were
closed for the day.
Still, Wednesday marked the third day of losses for the S&P
500 in its worst three-day decline since mid-November.
A Republican plan that failed to gain traction last week
triggered the S&P 500's recent drop, highlighting the market's
sensitivity to headlines centered around the budget talks.
"No one is hitting the panic button yet, and part of that
lack of panic selling is the notion that the Street is getting
comfortable with the likelihood of a temporary fix for the
fiscal cliff - something that gets us over the date of Jan. 1
in a way where it can be re-addressed," said Peter Kenny,
managing director at Knight Capital in Jersey City, New Jersey.
During the last five trading days of the year and the first
two of next year, it's possible for a "Santa rally" to occur.
Since 1928, the S&P 500 has averaged a gain of 1.8 percent
during that period and risen 79 percent of the time, according
to data from PrinceRidge.
The benchmark S&P 500 Index is up 12.8 percent for the
year, and has recouped nearly all of the losses after the U.S.
elections when the fiscal cliff concerns moved to the forefront.
This is the best yearly gain for the S&P 500 since 2010.
Data showed U.S. single-family home prices rose in October,
reinforcing the view that the domestic real estate market is
improving, as the S&P/Case-Shiller composite index of 20
metropolitan areas gained 0.7 percent in October on a seasonally
In the energy sector, China's Sinopec Group and
ConocoPhillips will research potentially vast reserves
of shale gas in southwestern China over the next two years,
state news agency Xinhua reported. Conoco's stock fell 0.8
percent to $57.99.
An outage at one of Amazon.com Inc's web service centers hit
users of Netflix Inc's streaming video service on
Christmas Eve and was not fully resolved until Christmas Day, a
spokesman for the movie rental company said on Tuesday. Netflix
rose 0.8 percent to $90.97.