* Media report could indicate progress on deficit talks
* S&P 500 heading for second straight week of losses
* Dell shares decline as profit slides 47 percent
* Indexes down; Dow, S&P and Nasdaq all fall 0.2 pct
By Ryan Vlastelica
NEW YORK, Nov 16 (Reuters) - U.S. stocks were lower on
Friday as investors remained skeptical that a meeting between
President Barack Obama and congressional leaders would make
progress on dealing with the "fiscal cliff."
Futures had indicated a higher open after the Wall Street
Journal reported White House officials were in discussions that
could indicate increased flexibility in negotiations with
Republicans. Still, caution remains and the S&P 500 is on track
for its second straight weekly decline of more than 1 percent.
Citing sources familiar with the matter, the Journal said
officials were in advanced, internal talks to replace spending
cuts set to begin in January with a separate package of spending
cuts and tax increases. The White House had no comment on the
Investors worry that if no deal is reached on the large,
automatic budget cuts and tax hikes set to begin next year, the
economy could slip into recession.
"This is the first time we've had one iota of anything
constructive being done," said Todd Schoenberger, managing
principal at the BlackBay Group in New York. "That's very
positive, but you can be flexible and still have us go over the
cliff. Wall Street traders remain very nervous and need
something concrete to get done."
The gathering is set to begin at 10:15 a.m (15:15 GMT) at
the White House.
Democrats and Republicans have recently appeared to dig in
their heels into opposing positions, echoing last year's
political impasse over raising the U.S. debt ceiling.
The S&P is down 4.3 percent over the past two weeks, with
such sectors as financials and materials among
the hardest hit.
Energy shares have been stronger as crude oil advanced. A
flare-up in violence in the Middle East lifted oil prices on
concerns about a possible supply disruption. Brent crude
is up 3 percent over the past two weeks.
The Dow Jones industrial average was down 24.81
points, or 0.20 percent, at 12,517.57. The Standard & Poor's 500
Index was down 2.21 points, or 0.16 percent, at 1,351.12.
The Nasdaq Composite Index was down 6.69 points, or 0.24
percent, at 2,830.24.
The S&P is currently down 1.9 percent for the week, while
the Dow is off 2.2 percent and the Nasdaq is down 2.5 percent.
The S&P 500 sunk to a 3 1/2-month closing low on Thursday and
remained well below its 200-day moving average, which it
pierced last week.
While the S&P remains up 7.6 percent for the year, what had
looked like a stellar 2012 for stocks has turned into merely an
average year. Some investors have become more inclined to
protect their gains as 2012 draws to a close.
Dell Inc's stock slumped 7.1 percent to $8.88 and
was the biggest percentage decliner on the S&P 500 a day after
reporting a steep drop in its quarterly profit.
Sears Holdings Corp late Thursday reported a
quarterly loss that was narrower than expected, but same-store
sales fell on weak demand for electronics, sending shares down
11 percent to $51.83.
Gap Inc raised its full-year profit view, easing
concerns of a slowdown going into the holiday season and sending
shares 1.8 percent higher to $33.85.
J.M. Smucker Co reported a rise in second-quarter
earnings, helped by a drop in commodity costs, but the stock
fell 3.3 percent to $82.60.