By Scott Stoddard, Investor’s Business Daily

Wall Street reversed lower in sharply higher volume Tuesday as Congress returned from an election recess to start talks on averting the fiscal cliff.

The S&P 500 fell 0.4%, while the Dow Jones industrial average dipped 0.5% after both rose as much as 0.7% earlier. The Nasdaq fell 0.7% after rising 0.5% intraday. Volume soared 136% on the NYSE and rose 30% on the Nasdaq compared with Monday’s levels.

Cisco Systems (CSCO) jumped in after-hours trading after the maker of computer networking equipment reported better-than-expected quarterly earnings. The stock dipped a fraction during the regular session and remains well below its major support lines.

Cisco’s October fiscal first-quarter profit grew 12% on a 6% increase in revenue to $11.9 billion.

Regional banks were among the hardest hit Tuesday amid fears about looming tax hikes and spending cuts known as the fiscal cliff. Analysts say failure by Congress to soften the blow from the fiscal retrenchment would send the economy back into recession.

EverBank Financial Corp. (EVER) sank more than 3% in heavy volume as it heads for a test of its 10-week moving average. The holding company for a bank that mainly offers commercial loans in Florida is far past a 12.69 flat-base buy point.

The thinly traded stock, which went public in May at 10 a share, has fallen for five straight sessions since hitting a peak of 16.22 on Nov. 7. Its Accumulation-Distribution Rating has fallen in the past week from B+ to a neutral C, indicating a standoff between buyers and sellers.

PolyOne Corp., (POL) which makes specialized polymers for the plastics industry, fell almost 2%. It’s fallen for eight of the past nine sessions, including the last two in strong volume. Yet the stock is still extended past its 17.63 entry from a base-on-base pattern.

A pair of housing-related stocks got a lift after Home Depot (HD) reported better-than-expected profit and sales for the latest quarter. The building supply retailer raised its full-year sales forecast. The stock jumped almost 4% in huge trade, hitting a new 52-week high and clearing a 63.30 flat-base entry.

Paint supplier Sherwin-Williams (SHW) climbed 2% in double its average daily volume. The stock popped back above its 50-day line on Monday and is working on a flat base.

Williams Sonoma (WSM), which operates home furnishing stores, climbed more than 1% in modest turnover, rebounding off its 50-day line. The stock is extended past a 40.86 buy point from a cup-without-handle base.

Williams Sonoma (WSM), PetSmart (PETM), Limited Brands (LTD) and Abercrombie & Fitch (ANF) are scheduled to report quarterly earnings Wednesday.

Meanwhile, the government is expected to report Wednesday that retail sales fell 0.2% in October, though sales excluding autos likely rose 0.1%. Also, producer prices likely rose 0.1% last month. Mortgage applications data for last week are also due.