Stocks Fall In Choppy Session; Nasdaq Ends Below 3000

By Vincent Mao, Investor’s Business Daily

Stocks ended modestly lower after a choppy session Tuesday. There was little in the way of economic data, but worries over the fiscal cliff persisted.

The Nasdaq fell 0.2% and closed below the psychological 3000 level. The S&P 500 also lost 0.2%, while the Dow Jones industrial average slipped 0.1%. Volume rose on both major exchanges, according to preliminary data.

Qihoo 360 Technology (QIHU) tumbled 5% in heavy trading and erased the bulk of Monday’s move. Despite this, the stock is still 7% past a 24.40 buy point in a cup-with-handle base. Qihoo initially broke out Nov. 20, but quickly retreated to it 50-day line before bouncing back.

Rival Baidu (BIDU) dropped 6% to a two-year low in more than double its average trade. The former market leader is now 40% off its record high.

Restaurant stocks were under pressure after Darden Restaurants (DRI) guided fiscal Q2 earnings below expectations due to failed promotions at its Red Lobster, Olive Garden and LongHorn Steakhouse chains. Darden shares tumbled 10% to a near 10-month low. Cheesecake Factory (CAKE) dropped 4%, while Texas Roadhouse (TXRH) and BJ’s Restaurants (BJRI) lost 5% and 6%, respectively each.

On the upside, DSW (DSW) rallied 4% to a brand new high in heavy trading. The lift puts it 2% past a 69.25 buy point in a flat base cleared Nov. 20. DSW declared a Q4 dividend of 18 cents a share and moved the payment date up to Dec. 28. Traditionally, the shoe retailer pays the fourth-quarter dividend in March. Also William Blair started coverage of the stock with an outperform rating.

A barrage of economic data will be released Wednesday. These include the ADP employment survey, Q3 productivity, factory orders and the ISM Services index. Ascena Retail Group (ASNA), Francesca’s Holdings (FRAN), Men’s Wearhouse (MW) and Vera Bradley (VRA) will also be reporting earnings Wednesday.

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