Wall St slips on cliff caution, but homebuilders gloss

NEW YORK (Reuters)-u.s. stocks fell on Tuesday as the wrangling continued in Washington over budget talks, while homebuilders stocks outperformed the broader market after positive data.

Strengthening the case for a sustainable rebound in housing construction, single-family home prices rose for an eighth straight month in September. The Semiconductor Sector index housing.HGX advanced 0.5 percent, with all but one of the 19 items gains books.

"As long as you have an interest rate as low as they are now, housing is definitely back," said Brian Amidei, managing director at HighTower Advisors in Palm Desert, California.

Despite strong housing data, an increase of more than the scheduled business expenditure and a 4-year high in consumer sentiment traders were cautious as politicians in Washington made little progress in the treatment of the "fiscal cliff."

Markets have lately focused on whether Congress and the White House can agree on ways to prevent some $ 600 billion in cuts and tax increases the automatic due to kick in early next year.

"If there is any reason why the (stock) market is jammed, it is because large investors have decided to take a step back and see this game, because I think she's very aware of how important this is," said Hugh Johnson, chief investment officer of Hugh Johnson Advisors LLC in Albany, New York.

The Dow Jones industrial average.DJI fell 74.53 points, or 0.57 percent, to 12, 892.84. The S P 500 Index &. SPX dropped 5.68 points, or 0.40 percent, to 1, 400.61. The Nasdaq Composite Index shed 4.80 points, or 0.16 percent, IXIC. to 2, 971.98.

The S P 500 & stopped 1,400, an important psychological level the recovered last week. Last week, got the S & P 500 nearly 4 percent.

As budget negotiations hang, Las Vegas Sands (LVS.N) and Supertex (SUPX.O) added their names to a growing list of companies announcing special dividends aimed at helping investors to avoid a possibly higher tax burden next year.

Las Vegas Sands jumped 5.5 percent to $ 46.46. Supertex rose by 3.4 percent to $ 17.41.

Food maker Ralcorp Holdings (RAH.N) shares rose 26.5% to $ 88.82 after long time freer unknown foods (CAG.N) sealed a deal to buy for $ 5 billion. Unknown acquired shares 4.3 percent to $ 29.50.

Corning Inc. (GLW.N) shares rose 6.7 percent to $ 12.11 after the specialty glass maker said that it expects that the sale of its entire year Gorilla glass, which is used in smartphones and tablets, approach $ 1 billion.

McMoRan exploration co. (MMR.N) shares tumbled 11.8 percent to $ 8.51 per day after the oil and gas industry driller gave a disappointing update on a prospect important gas in a Gulf of Mexico.

(Reporting by Rodrigo Campos; Editibg of Jan Paschal)

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