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Stock Futures Pare Gains After Downbeat Retail Data

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NEW YORK ( TheStreet) -- U.S. stock futures were paring gains Wednesday after some downbeat domestic retail sales data.

Futures for the Dow Jones Industrial Average were advancing 30 points, or 37.82 points above fair value, at 12,747. Futures for the S&P 500 were up 5.10 points, or 4.97 points above fair value, at 1376. Futures for the Nasdaq were rising 12.25 points, or 12.74 points above fair value, at 2572.

"With the majority of earnings reports in (approximately 70% better than expected) and the elections complete the equity markets are searching hard for direction and the fiscal cliff is clearly the major concern of the moment and the main driver," said Mike Boyle, senior vice president, Asset Management of Advisors Asset Management . "Given this we would look for the S&P 500 to tack between 1350 and 1430 through year-end as the fiscal cliff negotiations heat up, but we fully expect the cliff to be averted and the S&P 500 to post a double digit return for 2012 and again in 2013."

President Barack Obama is scheduled to speak at the White House Wednesday and meet with dozens of corporate executives as he works towards striking a deal on the fiscal cliff with Congress.

The Census Bureau reported Wednesday that retail sales fell 0.3% in October, more than the 0.2% decline expected by economists, after increasing by an upwardly revised 1.3% in September.

Excluding motor vehicles, retail sales were unchanged; economists had forecast an increase of 0.2%.

"October's U.S. retail sales figures suggest that consumption has lost a bit of momentum ahead of the crucial holiday shopping season," said Paul Dales, senior U.S. economist at Capital Economics. "Even after excluding sales of gasoline, autos and building materials, underlying sales fell by 0.1% month over month ... compares with an average rise of 0.6% month over month over the previous three months."

"It is hard to know how much of this is due to Hurricane Sandy (the Census Bureau said it doesn't know either) and how much may be due to a more general easing in spending growth linked to concerns over the fiscal cliff," Dales continued. "November's sales will be crucial. A bounce-back would point to a temporary Sandy-induced softening, while another soft month would suggest that the threat of a sharp fall in after-tax incomes in the new year is worrying households."

The Bureau of Labor Statistics reported that the producer price index fell 0.2% in October after advancing by 1.1% in September. Economists were expecting levels to increase 0.2%.

Excluding food and energy, the index fell 0.2% after being flat in September. Economists predicted an increase of 0.1%.

At 10 a.m., the Census Bureau is forecast to say that business inventories increased 0.5% in September after rising 0.6% in August.