U.S. stocks open lower on fiscal cliff fears; Dow sheds 0.2%

Investing.com - U.S. stock markets were mildly lower after the open on Tuesday, as initial optimism over news of a deal on financial aid for Greece gave way to concerns over the looming “fiscal cliff” in the U.S.

During U.S. morning trade, the Dow Jones Industrial Average fell 0.2%, the S&P 500 declined 0.15%, while the Nasdaq 100 shed 0.1%.

Euro zone finance ministers, the European Central Bank and the International Monetary Fund reached an agreement in a meeting that wrapped up early Tuesday in Brussels to reduce Greece’s debt-reduction target by EUR40 billion to 124% of gross domestic product by 2020.

Other measures included an extension of loan maturities, a cut in the interest rates that Greece is paying on the loans from its international partners, as well as a debt buyback.

Athens was also cleared to receive a much-needed EUR34.4 billion loan installment in December, easing fears over a messy near-term default and potential exit from the euro zone.

Eurogroup Chairman Jean-Claude Juncker said euro zone ministers would formally approve the release of the aid payment on December 13.

However, market players remained cautious as the latest agreement does not offer a fundamental resolution to the euro zone's debt crisis.

Meanwhile, markets participants continued to monitor developments surrounding the looming “fiscal cliff” in the U.S., approximately USD600 billion in automatic tax hikes and spending cuts due to come into effect on January 1.

Republicans in the U.S. Congress on Monday called on President Barack Obama to detail long-term spending cuts to help solve the country's fiscal crisis, while holding firm against the income tax rate increases for the wealthy that Democrats seek.

There are fears the U.S. economy will fall back into a recession, unless a divided Congress and the White House can work out a compromise in the five weeks left before the January 1 deadline.

Data released earlier in the day showed that total durable goods orders, which include transportation items, were unchanged in October, compared to expectations for a 0.6% decline.

Core durable goods orders, excluding volatile transportation items, rose by a seasonally adjusted 1.5% in October, confounding expectations for a 0.5% decline.

Standard & Poor’s with Case-Shiller said its house price index rose at an annualized rate of 3.0% in September from a year earlier, above expectations for a 2.9% increase.

Later in the day, the U.S. was to release data on consumer confidence.

In deal news, shares in food manufacturer Ralcorp Holdings surged 26% after it agreed to be acquired by packaged food giant Conagra Foods in a deal valued at nearly USD6.8 billion. The deal will create the largest packaged food company in North America.

Conagra shares jumped 4% on the news.

Casino operator Las Vegas Sands saw shares jump 3.5% after the company’s board approved payment of a USD2.75-a-share cash dividend to stockholders of record as of December 10. The payout will be made December 18.

Dillard’s shares were also higher on news of a dividend announcement, adding 2.75%.

In earnings news, Green Mountain Coffee Roasters was due to release quarterly results after Tuesday’s closing bell. Shares in the company were up 3.4% after the open.

Across the Atlantic, European stock markets were mixed. The EURO STOXX 50 dipped 0.1%, France’s CAC 40 was flat, Germany's DAX advanced 0.4%, while Britain's FTSE 100 tacked on 0.2%.

During the Asian trading session, Hong Kong's Hang Seng Index dipped 0.1%, while Japan’s Nikkei 225 Index added 0.4%.