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Markets skid, a day closer to cliff

NEW YORK, Dec. 4 (UPI) -- U.S. stock indexes slid Tuesday with investors focused on budget talks in Washington.

Congressional Republicans on Monday submitted a budget plan to the White House that would include a rejection of billions of dollars in stimulus spending President Obama has proposed.

Lawmakers have until the end of December to come up with a compromise. Many analysts are saying there will be plenty of political rhetoric until a deal is reached -- rhetoric that is likely to have a direct influence on stock markets.

If a compromise is not signed into law by Dec. 31, tax cuts enacted during the administration of George W. Bush will expire along which several instituted in the last four years, and draconian spending cuts will kick in, especially for defense spending. This has been described as a "fiscal cliff" that could send the economy into a second recession.

In early afternoon trading Tuesday, the Dow Jones industrial average lost 11.25 points or 0.09 percent to 12,954.35.

The tech-heavy Nasdaq index shed 16.52 points or 0.55 percent to 2,985.68. The Standard and Poor's 500 dropped 4.37 points or 0.31 percent to 1,405.09.

The 10-year treasury note rose 5/32 to yield 1.607 percent.

The euro rose to $1.3095 from Monday's $1.3053. The dollar fell to 81.8 yen from 82.25 yen.

Japan's Nikkei 225 index gave up 0.27 percent, 25.72 points, to 9,432.46.

Britain's FTSE 100 index lost 0.04 percent, 2.20 points, to 5,869.04.

Retail has off week in critical month

WASHINGTON, Dec. 4 (UPI) -- U.S. retail sales slipped sharply during the week that ended Saturday, a Washington retail trade group said.

Sales receipts dropped a "hefty" 3.1 percent week-to-week, the International Council of Shopping Centers-Goldman Sachs weekly consumer tracking survey said.

From the same week of 2011, sales rose 3.2 percent. However, consumers are not keeping up with the pace of holiday gift-buying as they did in 2011, the report said.

"Overall consumer traffic was lower than during the same week of the prior year with weakness at discounters, department stores, dollar stores and online," the trade group said.

Further, the report said consumers "fell behind the prior year's pace of holiday gift completion."

That implies sales could pick up before the holidays are here, given more consumers have more shopping to do at this point compared to 2011.

In 2011 at this point on the calendar, 46 percent of consumers in a survey indicated they had completed their holiday shopping. This year, 37 percent indicate they are done shopping for the holidays.

New York PMI positive for November

NEW YORK, Dec. 4 (UPI) -- Business activity in New York City rebounded in November after taking a punch from Hurricane Sandy, the Institute of Supply Management said Tuesday.

The current Purchasing Managers Index came in at 525 in November, a number that shows business growth, as it is higher than the break-even point of 50.

In addition, optimism for business conditions over the next six months came to 75.3, posting "one of the largest one-month gains on record," the monthly report said.

The city's employment index showed growth at 51.6. The prices paid index came in at 54.7, sliding off of a six-month high.

Revenues remained in contraction. But 45.8 mark for revenues is expected to be temporary, as the Expected Demand index came in at 69.6.

British construction activity slows

LONDON, Dec. 4 (UPI) -- The Purchasing Managers Index for Britain's construction sector fell into negative territory last month, Chartered Institute of Purchasing & Supply said.

The PMI, which indicates business growth with numbers above 50, dropped from 50.9 to 49.3 in the month, its lowest level since August.

Both house building and commercial construction slowed, the report said. For commercial construction, the decline was the steepest since December 2009.

Civil engineering activity rose in the month, posting its highest level in seven months. But new orders for construction projects fell at the fastest pace in nearly 3 1/2 years.

The numbers make 2012 "a year to forget," Markit senior economist Tim Moore said in a statement Tuesday.

"November's PMI survey suggests that construction output has yet to hit rock bottom," he said.