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He thinks U.S. stocks will continue to inch forward
-- not because investors are particularly optimistic about U.S. companies but because they have even less faith in European governments. "We're the best house in a bad neighborhood," he said. Downbeat economic news from Europe reinforced the danger. Greece said its economy shrank drastically at the end of last year, and Europe is expected to report Wednesday that the economies of the 17 countries that use the euro shrank 0.4 percent after growing 0.1 percent the quarter before. Late Monday, Moody's also downgraded its debt ratings on six European countries, including Italy, Portugal and Spain. Moody's also said it might cut France, Austria and the U.K. as well. News out of the U.S. was also disappointing. The Commerce Department said U.S. retail sales rose 0.4 percent last month, but analysts were expecting 0.7 percent, and spending on auto sales was down. Automakers had reported higher sales, so Tuesday's numbers could mean they have had to offer more discounts to persuade customers to spend. Yahoo fell 5 percent after reports that its plans to sell its Asian assets, a key strategy for turning around the troubled company, fell apart. Goodyear Tire and Rubber Co. fell 5 percent after its fourth-quarter profits missed analysts' expectations. Bank of America fell 3.3 percent after Citi analyst Keith Horowitz downgraded his rating to neutral, saying the bank's "legacy issues," notably its 2008 purchase of mortgage lender Countrywide, "will take a while to play out." Luxury retailer Michael Kors Holdings Limited was a bright spot, shooting up 28 percent after revenue skyrocketed 68 percent in the latest quarter. The company, which peddles $300 sequined jumpsuits and wristwatches at stores in cities like Milan and Paris, was helped by strong holiday sales as well as new stores. Its results are also a sign that wealthy customers are continuing to shop even as the rest of the economy struggles.
[Associated
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