* Euro's decline curbs stocks
* Futures edge up after news of U.S. tax deal
* Bernanke says Fed could buy more bonds
* Dow off 0.2 pct, S&P off 0.1, Nasdaq up 0.1 pct
* For up-to-the-minute market news see []
(Adds tax deal reaction)
By Chuck Mikolajczak
NEW YORK, Dec 6 (Reuters) - Worries about Europe's debt
crisis frustrated investors looking for a reason to take
stocks to new highs for the year as the major indexes ended
flat on Monday.
But stock futures edged higher after U.S. President Barack
Obama said he had reached an agreement with Republicans on how
to extend expiring tax cuts. For details, see []
"In a nutshell, this is precisely the kind of conversation
the Street was expecting from Washington -- it is clearly
compromise," said Peter Kenny, managing director at Knight
Equity Markets in Jersey City, New Jersey.
"It was absolutely no surprise at all, and it will not
hurt the market. I doubt that it will help a great deal, but
it certainly leaves the market undisturbed."
Even with a slight decline in the S&P 500, analysts still
see the benchmark index soon breaking out of its recent range
and surpassing its current intraday high for the year just
above 1,227 reached on Nov. 5. Technology shares limited
losses, and the Nasdaq advanced on positive brokerage comments
on Cisco Systems and Cognizant Technology Solutions Corp.
In Europe, Germany rejected attempts by euro-zone finance
ministers to increase the size of a 750-billion-euro ($1
trillion) safety net for debt-stricken members.
[]
A drop in the euro limited stocks' advance as the two have
moved in a tight correlation recently, with the euro acting as
a proxy for debt concerns overseas.
Further adding to conflicting sentiment were downbeat
comments from U.S. Federal Reserve Chairman Ben Bernanke,
which outweighed his attempts to reassure markets the Fed
could potentially boost the planned size of its stimulus
efforts if necessary. For details, see []
"I was listening to the tone of his voice -- the tone of
his voice made me nervous. As a trader and a manager, it made
me nervous," said Paul Mendelsohn, chief investment strategist
at Windham Financial Services in Charlotte, Vermont.
"I think he was trying to sell the American people,
because he has been under pressure."
S&P RESISTANCE PEGGED AT 1,228
Cisco <CSCO.O> rose 1.9 percent to $19.43 after
Oppenheimer raised its rating on the stock to "outperform,"
and Cognizant <CTSH.O> added 0.7 percent to $69.80 after
Goldman Sachs boosted it to "buy." [] []
Analysts view key resistance for the benchmark S&P 500 at
1,228 because it's just above the year's high and coincides
with the 61.8 percent Fibonacci retracement of the 2007-2009
bear market slide.
"If the (euro) problem is again pushed forward and that
relief comes off the market, the market will probably push
higher here towards new highs into year-end," Mendelsohn
added.
Also looking ahead in equities, Goldman Sachs Asset
Management Chairman Jim O'Neill, speaking at the Reuters 2011
Investment Outlook Summit in New York, gave a bullish view on
stocks, saying global equity markets are likely to see gains
of up to 20 percent through 2011. []
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
For other news from the Reuters 2011 Investment Outlook
Summit, click on
http://www.reuters.com/summit/InvestmentOutlookDec10
Reuters Insider show on S&P to Go Higher Despite Weak
Volume http://link.reuters.com/vam78q
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The Dow Jones industrial average <> dropped 19.90
points, or 0.17 percent, to end at 11,362.19. The Standard &
Poor's 500 Index <.SPX> shed 1.59 points, or 0.13 percent, to
1,223.12. But the Nasdaq Composite Index <> gained 3.46
points, or 0.13 percent, to 2,594.92.
Volume was light with about 6.27 billion shares traded on
the New York Stock Exchange, the American Stock Exchange and
Nasdaq, well below the year-to-date average of 8.62 billion.
Declining stocks slightly outnumbered advancing ones on
the NYSE by 1,502 to 1,464, while on the Nasdaq, advancers
beat decliners by a ratio of about 4 to 3.
(Reporting by Chuck Mikolajczak; Editing by Kenneth Barry and
Jan Paschal)
