* Bernanke: Fed lacks tools to offset "fiscal cliff"
* Moody's cuts France credit rating
* Hewlett-Packard shares hit 10-year low after charge
* Dow down 0.5 pct, S&P 500 down 0.4 pct, Nasdaq down 0.5
By Caroline Valetkevitch
NEW YORK, Nov 20 U.S. stocks slid as Federal
Reserve Chairman Ben Bernanke's comments added to worries about
the economic impact of the U.S. "fiscal cliff" and
Hewlett-Packard's stock sank on news of an $8.8 billion
Bernanke, in comments before the Economic Club of New York,
said the Fed does not have the tools to offset the damage that
would result if politicians fail to strike a deal to prevent
going off the fiscal cliff. If a solution isn't approved in
time, then mandatory tax increases and spending cuts will go
into effect early next year. Bernanke said he does not believe
the possible benefits of cutting the interest it pays on bank
reserves are sufficient to outweigh the risk of trouble in money
"In the short run, we're hostage to the fiscal cliff. I
think (Bernanke's) got to be really, really fearful that
Washington doesn't get its act together and that creates
stresses on the financial system," said Dan Veru, chief
investment officer of Palisade Capital Management in Fort Lee,
Stocks rallied for the last two sessions on optimism that
Washington politicians could agree on a deal to avoid the U.S.
fiscal cliff. But the gains followed two weeks of sharp losses.
Hewlett-Packard Co shares sank 12 percent to a
10-year low at $11.70 as the computer and printer maker swung to
a fourth-quarter loss. The company said it took an $8.8 billion
charge related to its acquisition of software firm Autonomy,
citing "serious accounting improprieties."
The Dow Jones industrial average was down 63.43
points, or 0.50 percent, at 12,732.53. The Standard & Poor's 500
Index was down 5.78 points, or 0.42 percent, at 1,381.11.
The Nasdaq Composite Index was down 15.01 points, or
0.51 percent, at 2,901.06.
Another factor weighing on stocks was Moody's Investors
Service's reduction of France's sovereign rating by one notch to
Aa1 after the market's close on Monday. Moody's cited an
uncertain fiscal outlook as a result of the weakening economy.