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The stock market edged lower Monday morning, pulled down by old worries about the debt crisis in Europe and a political standoff over taxes and spending in the U.S.
In early trading, the Dow Jones industrial average was down 66 points at 12,945. The Standard & Poor's 500 was down 6 to 1,403. The Nasdaq composite index slipped less than a point, to 2,966.
Monday was the first trading day after the beginning of the holiday shopping season, a crucial time for retailers that rely on Christmas shopping to make up for shortfalls during the rest of the year. But the impact of Thanksgiving Day, Black Friday and the rest of the weekend was hard to read.
The National Retail Federation reported that 247 million shoppers visited stores and shopping websites during the Thanksgiving holiday, up 9 percent from a year ago. They spent an average of $423, up 6 percent.
Still, retailers worry that the momentum won't last. Retailers like Macy's, Target and Saks were down in early trading.
One major reason is the overhang of the "fiscal cliff." That's when both higher taxes and cuts to government programs, like unemployment benefits and Social Security, will kick in at the end of the year unless Congress and the White House work out a compromise before then.
A government report released Monday warned that a sudden increase in taxes would result in lower consumer spending next year, and some analysts wondered if the concerns about what could happen might crimp spending throughout the rest of the holiday season.
The report, by President Barack Obama's National Economic Council and his Council of Economic Advisers, estimated that a married couple earning between $50,000 and $85,000 with two children would see a $2,200 increase in their taxes.
The White House wants to raise some taxes, but key business groups have protested vehemently. The homebuilding industry says it won't stand for even small cuts to the mortgage interest deduction, a tax break that's meant to encourage homeownership. AARP has publicly lobbied against cuts to Medicare and Social Security.
To be sure, the fiscal cliff fighting could be mostly grandstanding for lawmakers. Lawmakers often fight over budget issues until the dramatic 11th hour, then work out a compromise at the last moment.
Overall, Monday morning was quiet, with no major economic reports due in the U.S. and no major companies scheduled to make big announcements. In Europe, leaders of European Union countries tried to hammer out a deal to lend more money to debt-crippled Greece, but many analysts have come to view that as another tired theme that has already been baked into the markets.
Count David Kelly, chief global strategist at JPMorgan Funds, among the underwhelmed.
"The themes seem about as recycled as Thanksgiving turkey," Kelly wrote in a note to clients, referring to the fiscal cliff and the European debt crisis. He expected a better read on the economy later this week, with reports on consumer confidence on Tuesday, and unemployment claims and third-quarter economic growth on Thursday.
Sam Stovall, chief equity strategist at S&P Capital IQ, was similarly unmoved. "Most of these uncertainties have been with us for quite some time," he wrote in a note, "and are now regarded by many as annoyances to resolve rather than obstacles to fear."
Overall, the U.S. economy has been hard to read. For every sign that it is improving, there's another that indicates it's not. The market jumped 421 points last week, one of the best weeks of the year. It was down for four straight weeks beforehand.
Stocks opened the trading day lower as investors returned to the market after a holiday-shortened trading week, focused on the meeting of euro zone finance ministers on Greece and negotiations over the U.S. fiscal cliff.
The fiscal cliff concerns dampened what had been a huge weekend for retailers.
The Dow Jones industrial average fell 85 points to 12,925 shortly after the opening bell Monday.
The Standard & Poor's 500 index lost eight points to 1,401 and the Nasdaq composite was also off eight points at 2,959.
Shoppers flooded stores in record numbers over the weekend, according to the National Retail Federation. The organization said 247 million shoppers visited stores and shopping websites during the Thanksgiving holiday, up 9.2 percent from last year.
On Monday, however, the National Economic Council and the Council of Economic Advisers said that a sudden increase in taxes for middle-income taxpayers could reduce consumer spending next year by nearly $200 billion.
Euro zone finance ministers and the International Monetary Fund will seek to unfreeze the second bailout package for Greece on Monday, but they first need to agree if some of the official loans to Athens might eventually be forgiven to cut Greek debt.
U.S. lawmakers have made little progress in the past 10 days toward a compromise to avoid the harsh tax increases and government spending cuts scheduled to start taking effect on January 1, a senior Democratic senator said on Sunday.
"On the most pressing issue for the markets into year end, that of the tax and spending issues in the U.S., the Sunday morning talk shows didn't reveal that we're on the cusp of a deal as more horse trading will go on in the weeks to come," said Peter Boocvkar, managing director at Miller Tabak & Co in New York.
U.S. shoppers went to stores earlier this Thanksgiving weekend and bought online more than in years past, giving retailers a strong start to the holiday shopping season, data showed on Sunday. Total spending for the long weekend rose to $59.1 billion, up 12.8 percent from last year, according to the National Retail Federation.
Black Friday's online sales topped $1 billion for the first time ever as more consumers used the Internet do their early holiday shopping, comScore said on Sunday.