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Stocks fall as US retail sales growth misses estimates and debate on Greek bailout continues
NEW YORK (AP) ' Stocks opened lower on Wall Street Tuesday, weighed down by disappointing news about January retail sales in the U.S. and continuing economic struggles in Europe.
The Dow Jones industrial average slid 45 points to 12,828 in the first hour of trading. Bank of America led the Dow lower with a decline of 3.3 percent. The Standard & Poor's 500 fell 7 points to 1,345. The Nasdaq fell 13 points to 2,919.
The declines were broad. The only one of the 10 industry categories in the S&P 500 to rise was health care, which investors tend to buy when they're being cautious. Financial companies fell the most, followed by materials makers.
A modest gain in retail sales last month didn't get investors in a buying mood. The Commerce Department reported that U.S. retail sales edged up 0.4 percent last month, less than the 0.7 percent growth analysts had predicted.
The bigger problem was Europe, where Greece is still locked in a drawn-out battle over how to cut spending and restart growth. The debt-laden country has signed off on incremental agreements to rein in government spending, including the passage of spending cuts over the weekend despite widespread protests from citizens.
Greece's lenders are demanding the spending cuts before they agree to a financial support package that should keep Greece from defaulting on debts due next month. The lenders want Greece to cut pharmaceutical spending, pensions and other services that its citizens have grown to expect.
The debt talks have been contentious at times, and the lenders ' including the International Monetary Fund, the European Union and the European Central Bank ' have even raised questions about whether Greece actually prefers to default on its loans rather than cut its generous government spending. Critics on the other side counter that forcing Greece to cut spending will only further quash its attempts to jumpstart its economy.
A slew of downbeat economic news from Europe reinforced that danger. Greece said its economy shrank 7 percent in the fourth quarter, Europe's statistics office is expected to report Wednesday that the euro zone's economy shrank 0.4 percent in the fourth quarter, after growing 0.1 percent the previous quarter.
Late Monday Moody's downgraded its debt ratings on six European countries, including Italy, Portugal and Spain. Moody's also said it might cut France, Austria and the U.K. as well.
Among the biggest movers in the U.S. stock market:
'Goodyear Tire and Rubber Co. fell 5 percent after its fourth-quarter profit missed analysts' expectations.
'Avon Products Inc. rose 3 percent even after the company reported a fourth-quarter loss driven by slumping sales and rising costs. The cosmetics giant, known for its army of door-to-door sellers, is under investigation for alleged bribery in China. Despite its morning climb to about $18, it's still down significantly from a year ago, when it was around $29.