NEW YORK-Wall Street came back to work yes­ter­day af­ter the Thanks­giv­ing week­end and faced left­over wor­ries about the "fis­cal cliff" and the Eu­ro­pean debt cri­sis. Stocks re­treat­ed af­ter one of their best weeks of the year. The Dow Jones In­dus­tri­al Av­er­age fell 42.31 points to 12,967.37. The Stan­dard & Poor's 500 in­dex de­clined 2.86 to 1,406.29. And the Nas­daq com­pos­ite in­dex man­aged a 9.93-point in­crease to 2,976.78.

Util­i­ty stocks rose the most, while telecom­mu­ni­ca­tions com­pa­nies fell the most. The ma­jor US eco­nom­ic re­ports were not due un­til lat­er in the week, leav­ing in­vestors to re­hash the Eu­ro­pean debt cri­sis and talks in Wash­ing­ton over the "cliff" of tax in­creas­es and gov­ern­ment spend­ing cuts set to take ef­fect Jan­u­ary 1.

"The themes seem about as re­cy­cled as Thanks­giv­ing turkey," David Kel­ly, chief glob­al strate­gist at JP­Mor­gan Funds, wrote in a note to clients. 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.

Scott Car­ma­ck, co-port­fo­lio man­ag­er at Leader Cap­i­tal in Port­land, Ore­gon, said yes­ter­day's de­cline was all but in­evitable af­ter last week, when the Dow climbed 3.3 per cent be­cause of en­cour­ag­ing signs from Wash­ing­ton and good eco­nom­ic news over­seas.

That made Mon­day a good day to cash out on last week's gains, Car­ma­ck said, es­pe­cial­ly be­cause traders aren't sure how the fis­cal cliff will af­fect the mar­ket for the rest of the year. "Mon­day is a good day to take prof­its," Car­ma­ck said. "No one was in on Fri­day, so they're do­ing it Mon­day."

The Na­tion­al Re­tail Fed­er­a­tion re­port­ed that 247 mil­lion shop­pers vis­it­ed stores and shop­ping web­sites dur­ing the long Thanks­giv­ing week­end, up nine per cent from a year ago. They spent an av­er­age of US$423, up six per cent.

Some wor­ry that the mo­men­tum won't last, and that deep dis­count­ing will hurt stores. Ma­cy's fell US$1.87, or 4.5 per cent, to US$39.86. Saks dropped 29 cents, or 2.8 per cent, to US$10.23. Tar­get de­clined US$1.71, or 2.6 per cent ,to US$62.77. Aber­crom­bie & Fitch was an ex­cep­tion, ris­ing 21 cents to US$44.61.

The cliff cast a pall. A gov­ern­ment re­port re­leased Mon­day warned that a sud­den in­crease in tax­es would crimp the spend­ing of mid­dle class fam­i­lies next year, and some an­a­lysts won­dered whether fam­i­lies would curb spend­ing be­fore the year is over.

The re­port, by Pres­i­dent Barack Oba­ma's Na­tion­al Eco­nom­ic Coun­cil and his Coun­cil of Eco­nom­ic Ad­vis­ers, es­ti­mat­ed that a mar­ried cou­ple earn­ing be­tween US$50,000 and US$85,000 with two chil­dren would see a US$2,200 in­crease in their tax­es.

In Eu­rope, lead­ers of Eu­ro­pean Union coun­tries tried to reach a deal to lend more mon­ey to debt-crip­pled Greece. The min­is­ters have failed twice in the last two weeks to reach an agree­ment to re­lease &eu­ro;44 bil­lion, or US$56.8 bil­lion.

In the US, though, "Most of these un­cer­tain­ties have been with us for quite some time," Sam Sto­vall, chief eq­ui­ty strate­gist at S&P Cap­i­tal IQ, wrote in a note Mon­day, "and are now re­gard­ed by many as an­noy­ances to re­solve rather than ob­sta­cles to fear." In the bond mar­ket, the yield on the 10-year US Trea­sury note fell 2 per­cent­age points to 1.66 per cent from late Fri­day.

In oth­er stock trad­ing:

- Mc­Graw-Hill an­nounced it would sell its ed­u­ca­tion unit to a pri­vate eq­ui­ty firm. The com­pa­ny's stock rose 20 cents, or 0.4 per cent, to US$51.89.

- Face­book stock jumped US$1.94, or 8.1 per cent, to US$25.94 af­ter a Bern­stein an­a­lyst up­grad­ed his rat­ing of the com­pa­ny, pre­dict­ing it will beat rev­enue ex­pec­ta­tions for the near fu­ture.