--Stocks rise, reversing earlier losses
--Europe ticks higher, despite Greek debt solution delay; German
economic
expectations index declines
--Home Depot leads blue chips on better outlook; Microsoft
slides
By Matt Jarzemsky
NEW YORK--Home Depot led a rally in stocks tied to consumers'
discretionary spending, leading U.S. stock benchmarks higher and
fueled optimism about the U.S. housing market.
The Dow Jones Industrial Average added 42 points, or 0.3%, to
12857 in midday trading. Home Depot climbed 4.1% after raising its
2012 earnings forecast on housing-market improvement, putting the
blue-chip retailer on track to close at a 12-year high.
The Standard & Poor's 500-stock index rose six points, or
0.5%, to 1386. The Nasdaq Composite Index was up one point, or
0.1%, at 2906.
"We've seen some evidence the past few weeks of improvement in
the economy, particularly in the housing sector, and Home Depot
appeared to have good earnings," said Cameron Hinds, regional chief
investment officer at Wells Fargo Private Bank.
Worries about the fiscal cliff, a set of tax increases and
government spending cuts set to take effect Jan. 1 if politicians
can't reach a deal to avoid it, kept a lid on gains, Mr. Hinds
said.
European markets rose, with the Stoxx Europe 600 adding 0.4%,
despite disagreement between International Monetary Fund chief
Christine Lagarde and Eurogroup President Jean-Claude Juncker on
how Greece's debt should be tackled.
Meanwhile, the Center for European Economic Research's index of
German economic expectations for November fell well below
economists' expectations.
On the U.S. economic front, the National Federation of
Independent Business said its small-business optimism index for
October inched up in September, bucking economists' forecasts for a
decline.
The federal budget deficit widened to $120 billion in October,
the first month of the government's new fiscal year. The deficit
compared with a $98.47 billion shortfall last year and was greater
than economists' forecasts for $113 billion.
Asian markets also fell in response to concern about Greece.
China's Shanghai Composite shed 1.5% and Japan's Nikkei Stock
Average gave up 0.2% to record a seventh consecutive decline.
Crude-oil futures slipped 0.5% to $85.11 a barrel, while gold
futures lost 0.4% to $1,724.70 an ounce. The dollar eased slightly
against both the euro and the yen.
Elsewhere in the corporate arena, Microsoft fell 2.7% after news
that Steven Sinofsky, head of the software maker's Windows
business, is leaving the company.
Dick's Sporting Goods gained 4.9% after reporting quarterly
results that topped its forecast and raising its current-year
profit target.
Dow Chemical rallied 1% after Goldman Sachs analysts raised
their stock-investment rating on the company to "buy" from
"neutral."
Nanosphere added 3.3% after the medical-test maker said the U.S.
Food and Drug Administration cleared it to market a new diagnostic
tool.
-Write to Matt Jarzemsky at matthew.jarzemsky@dowjones.com