Stocks waver; Wal-Mart slumps as earnings fall

NEW YORK (AP) ? Stocks wavered between slight gains and losses in early trading as investors weigh worries about Europe against an increase in U.S. retail spending.

The Commerce Department said early Tuesday that Americans spent more on autos, electronics and building supplies in October, raising retail sales for a fifth straight month. Sales increased 0.5 percent from the previous month, better than forecasts.

Wal-Mart Stores and Staples fell in early trading after reporting quarterly earnings. Wal-Mart Stores Inc. posted a drop in profits and fell 2 percent.

Sales at Staples Inc. fell short of analysts’ expectations, and the company also cut its earnings forecast for the year. Its stock dropped 4 percent.

The Dow Jones industrial average was up 5 points to 12,084 as of 10 a.m. Eastern time. The Standard & Poor’s 500 index edged up 1 point to 1,253. The Nasdaq composite index rose 6 points, or 0.2 percent, to 2,658.

Higher interest rates on government debt from Italy, Spain and other European countries rattled stock markets in Europe early Tuesday. The market rate for Italy’s 10-year bond jumped back above 7 percent. When rates crossed the 7 percent threshold last week, it raised worries about the country’s ability to manage its debts. Greece, Ireland and Portugal were forced to seek lifelines when their borrowing rates crossed the same mark.

Among other companies reporting quarterly results, Home Depot said spending on home projects and storm-related repairs helped lift earnings. The country’s largest home-improvement retailer also raised its earnings estimate for the year. The stock rose nearly 1 percent. Department store chain Saks Inc posted stronger sales and rose 1.4 percent.

Dell Inc. reports quarterly results after the market closes.

Renewed worries over Europe’s debt crisis weighed on markets Monday. Italy had to pay the highest rate at an auction of five-year bonds since 1997, a sign investors are still worried about Italy’s ability to pay its debts. The Dow lost nearly 75 points. Bank stocks led the market lower.