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The uncertainties surrounding the economy and the hard drive shortage due to the flooding in Thailand means that Dell's fiscal 2012 full-year revenue is tracking at the lower end of its growth forecast of 1 to 5 percent, the company said.

Severe flooding in Thailand, which produces one-quarter of the world's hard drives, has sparked a rise in prices and stranded many factories.

Analysts on average had projected a 1.6 percent climb in Dell's fiscal 2012 revenue to almost $62.5 billion.

Dell said revenue in its fiscal third quarter was essentially flat at $15.36 billion, but slightly lower than the average analyst estimate of $15.65 billion according to Thomson Reuters I/B/E/S.

Net earnings for the quarter rose to $893 million, or 49 cents a share, from $822 million, or 42 cents a share, in the year-ago period.

Excluding items, Dell earned 54 cents a share, better than the average analyst estimate of 47 cents according to Thomson Reuters I/B/E/S.

Dell's large enterprise business increased sales 8 percent on good demand for desktop PCs, servers and networking equipment as corporations continued to upgrade aging hardware. Sales to consumers fell 6 percent.

Shares of Dell slid 2 percent to $15.32 in extended trade, after closing at $15.63 on Nasdaq.

(Reporting by Poornima Gupta; Editing by Richard Chang)

Total retail sales increased 0.5 percent, the Commerce Department said on Tuesday, after rising 1.1 percent in September. That was above economists' expectations for a 0.3 percent rise.

In a separate report, the Labor Department said its producer price index fell 0.3 percent last month after rising 0.8 percent in September. Economists had expected the PPI to fall only 0.1 percent.

"The data are uniformly positive," said Eric Green, chief U.S. economist at TD Securities in New York. Retail sales "is more than enough to keep the economy going. They continue to push back the recession fears that began this summer."

The economy grew at a 2.5 percent annual pace in the third quarter, fueled in part by consumer spending.

U.S. stock index futures trimmed losses after the data, while government debt prices pared gains. The dollar held gains against the euro. In the 12 months to October, retail sales were up 7.2 percent. While October's retail sales report showed broad gains, weak income growth remains a constraint.

Consumer spending -- which accounts for more than two-thirds of U.S. economic activity -- rose at its fastest pace in nearly a year in the third quarter. But households are significantly cutting back on saving to fund their spending.

Wal-Mart Stores Inc. Chief Executive Mike Duke said the retail giant's U.S. customers were still worried about jobs and only one in 10 mothers taking part in its surveys view the economy as "good."

With food prices rising faster than most wages, some shoppers were concerned about holiday meals, the company said.

Retail sales last month rose as receipts from motor vehicle dealers increased 0.4 percent, adding to the prior month's 4.2 percent gain.

Excluding autos, retail sales rose 0.6 percent, the largest increase in seven months, after advancing 0.5 percent in September.

Sales at food and beverage stores increased 1.1 percent, while receipts at sporting goods, hobby, book and music stores gained 1.3 percent. Sales of electronics and appliances soared 3.7 percent, while receipts from building material retailers increased 1.5 percent.

But clothing store sales fell 0.7 percent last month, the largest decline since December 2010, while furniture sales declined 0.7 percent.

Receipts at gasoline stations fell 0.4 percent last month after rising 0.7 percent. The decline reflects weak gasoline prices. According to the U.S. Energy Information Administration, gasoline prices fell 4.39 percent or 16 cents to $3.506 a gallon in October.

Excluding gasoline, retail sales rose 0.7 percent.

WHOLESALE PRICES FALL

Lower gasoline and consumer goods costs depressed prices received by farms, factories and refineries last month.

Excluding volatile food and energy, core wholesale prices were flat last month after climbing 0.2 percent in September.

Weak gasoline prices, combined with subsiding inflation pressures should ease the burden on stretched household budgets and support holiday shopping.

Core retail sales, which exclude autos, gasoline and building materials, rose 0.7 percent in October after advancing 0.5 percent the prior month.

Core sales correspond most closely with the consumer spending component of the government's gross domestic product report.

A gauge of manufacturing in New York state rose in November, ending five straight months of contraction, while the outlook for coming months strengthened, the New York Federal Reserve Bank said.

The New York Fed's "Empire State" general business conditions index rose to 0.61, up from minus 8.48 the month before. Economists polled by Reuters had expected a reading of minus 2.1.

(Reporting by Lucia Mutikani and Jason Lange; Editing by Neil Stempleman)

European shares and the euro fell on Tuesday as investors renewed selling of Italian and Spanish bonds and any relief from having new leaders in Italy and Greece proved short-lived with investors seeking safe-haven assets like German bonds.

Italy's 10-year bond yield rocketed back above 7 percent, pushing its borrowing costs to a level widely seen as unsustainable and which helped trigger the fall of Silvio Berlusconi's government last week.

Global markets harbor deep concerns about whether Monti and new Greek leader Lucas Papademos, unelected European technocrats without a domestic political base, can impose the needed tough austerity and far-reaching economic reform.

A think-tank report said the situation in triple-A rated France should also be "ringing euro zone alarm bells" because of the country's inability to make rapid adjustments to its economy.

Germany and France posted solid growth in the third quarter, statistics released on Tuesday showed, but euro zone nations on the front line of the debt crisis fared much worse and analysts expect bleaker times ahead in the core economies.

"The German economy has lost its immunity," said Carsten Brzeski of ING, a Dutch bank. "With the latest stage of the sovereign debt crisis, today's numbers are as good as it gets for the German economy."

As the euro zone's largest economy and growth engine for the past two years, any hiccups in the coming business quarters in Germany would have wider effects in the region.

A rebound in household consumption lifted France's growth to a better-than-expected 0.4 percent in the third quarter, after a contraction in the second, but economists warned it was just a lull before a likely return to recession.

"You could call this the lull in the storm," said Marc Touati of Assya Compagnie Financiere. "What's worrying is that industrial investment has started going down, which proves that the virtuous circle of investment, growth and job creation is not working."

"ALARM BELLS"

The urgency of resolving the crisis was underscored by a report by the Lisbon Council, which said France's inability to make rapid adjustments to its economy was a serious worry and should be of acute concern for the euro zone.

"Among the six euro zone countries with a AAA rating, France achieves by far the lowest ranking in the study's fundamental health check," the Brussels-based think-tank found in the 75-page report, called the Euro Plus Monitor.

"The results are too mediocre for a country that wants to safeguard its place in the top league ... Alarm bells should be ringing for France.

With the survival of the 17-state currency zone in its current form now at risk, EU governments have until a summit on December 9 to come up with a bolder and more convincing strategy, involving some form of massive, visible financial backing.

Prospects are uncertain as the German government, the Bundesbank and hardliners in the European Central Bank have so far blocked key policy options.

These include issuing common euro zone bonds, mutualizing the euro zone's debt stock, letting the ECB create money to fight the crisis, or having it act as lender of last resort, directly or via the euro zone rescue fund.

The debt crisis is likely to make matters worse in the next months with nations such as Italy, Greece, Ireland, Portugal and Spain forced to adopt politically unpopular cuts to stop the bond market driving them toward default.

Economists say there is no visible growth strategy in place to counter those austerity measures.

EUROPE FACES "TOUGHEST HOUR"

German Chancellor Angela Merkel caught the mood of crisis with a stark warning on Monday that Europe could be living through its "toughest hour since World War Two." She told her CDU party she feared Europe would fail if the euro failed and vowed to do anything in her power to stop this from happening.

Monti pursued his efforts on Tuesday to secure support from feuding politicians to allow his cabinet of experts to speed up reform of pensions, labor markets and business regulation needed to put Italy's finances on a sustainable footing.

Italy has to refinance some 200 billion euros ($273 billion) of bonds by the end of April, a daunting prospect.

High borrowing costs and the release of figures showing industrial production slumped by 2 percent in the euro zone in September, raised the specter of recession and provided a gloomy backdrop to Monti's talks with the heads of smaller parties.

"Monti spoke about a significant program with many sacrifices," Francesco Nucara, a lawmaker from one of the myriad tiny parliamentary groups involved in the talks, said after meeting the prime minister-designate.

Monti, a respected former European commissioner, on Tuesday met leaders of the two largest parties of the center-right and the center-left, unions, and representatives of women and youth groups.

Expected to seek a confidence vote by Friday, Monti has said that he aimed to serve until scheduled elections in 2013, not just until reforms had been pushed through.

Far-reaching reforms are seen as crucial if Italy is to end years of stagnant growth, trim a debt mountain equal to 120 percent of gross domestic product and avoid the sort of crisis that forced bailouts of Greece, Ireland and Portugal.

GREEK DEFAULT FEARS

Papademos said late on Monday that Greece had no choice but to stay in the euro zone, telling lawmakers reforms were the only solution.

But conservatives on whom Papademos must rely for support demanded pro-growth policies and rejected any more cuts, fueling fears of a Greek default that may force Athens out of the currency group triggering a euro zone debt meltdown.

Austerity measures had deepened Greece's recession but reforms -- including widening the tax base and fighting rampant tax evasion -- could mitigate the problem, said Papademos, who oversaw Greece's entry to the euro zone in 2002.

But New Democracy leader Antonis Samaras said he would not vote for new austerity measures. Spending cuts and tax rises agreed with foreign lenders should be changed in favor of economic growth, he said.

Inspectors for Greece's international lenders, known as the troika, were due to meet Papademos's administration after the confidence vote, but an EU official said the visit might not happen until the end of the week.

Most Greeks hailed Papademos's appointment, but thousands of people angry at more than a year of austerity are expected to rally on Thursday, the anniversary of a 1973 student uprising that helped to bring down the colonels' junta of 1967-74. ($1 = 0.734 Euros)

(Additional reporting by Luke Baker in Brussels; Writing by Peter Millership; Editing by Giles Elgood)

The Berkshire Hathaway chief executive said he has bought nearly $11 billion of International Business Machines Corp stock in the last eight months, building a roughly 5.5 percent stake that potentially makes him the largest shareholder in the company.

It was a surprise reversal for Buffett, who has always said he would not invest in technology because he largely did not understand it. But in an interview on cable television network CNBC, Buffett said he was struck by IBM's ability to retain corporate clients, which made it indispensable in a way that few other services are.

"It's a company that helps IT departments do their job better. It is a big deal for a big company to change auditors, change law firms" or to switch to a new technology vendor, Buffett said.

"I don't know of any large company that really has been as specific on what they intend to do and how they intend to do it as IBM," said Buffett, who teased CNBC's anchors for a few minutes with a guessing game about what the major investment was before unveiling the IBM news.

IBM shares, which have a market value of about $220 billion, were up 0.2 percent to $187.79 in afternoon trading. Earlier they hit $189.84, nearing the all-time high of $190.53 that the stock touched in mid-October.

Buffett, known as one of the best value investors of all time, appeared to have come to IBM late in the game -- a year ago the stock was a third lower than it is now. Buffett himself said he should have paid more attention to IBM five years ago.

Yet technology analysts said he had still gotten a good deal.

"Maybe he could have gotten a better price ... but if you look at Warren Buffett's investment policy I would assume this is a long term investment," said Collins Stewart analyst Louis Miscioscia. "This is not your father's IBM; the management has done a good job of cost control, returning cash to shareholders."

CHANGE OF PLANS

Though it seems like a contrarian move, one long-time Berkshire investor speculated that Buffett was buying IBM for its services business rather than its technology platform.

"It's going to be one of the four or five 'generals' in the portfolio," said Steve Check, chief investment officer of Check Capital Management, a California firm.

Another long-standing Berkshire shareholder said the investment was also a global play.

"More confirm(ation) that he sees international as more important," said Michael Yoshikami, chief executive of wealth manager YCMNET Advisers, which manages about $1 billion and holds Berkshire shares.

The investment fits with Buffett's desire to make big bets. Earlier this year, in his annual letter to investors, he joked about having a loaded elephant gun ready to make big deals.

He has followed through on that, buying chemicals company Lubrizol, investing $5 billion in Bank of America Corp and taking the IBM position.

Though Berkshire started buying IBM shares in March, Buffett's comments suggested the firm did not cross reporting thresholds on the investment until the third quarter, which let him keep the stake secret until Monday.

Buffett has also previously asked for, and received, the right to keep some investments temporarily confidential on the grounds that, given his notoriety, if his trades were to be known, masses of investors might try to pile in as well.

The IBM stake was so confidential, in fact, that the company had no idea Buffett was investing in it until he disclosed that he had bought 64 million shares on TV on Monday. An IBM spokesman declined to comment.

According to Thomson Reuters data, Buffett's 5.5 percent position in IBM would tie him with State Street Corpinvestment management affiliate State Street Global Advisors for the largest stake in the company.

During the third quarter, IBM shares traded in a range of $157.14 to $185.61, suggesting that no matter when Buffett bought, he is still up on his investment at least $160 million.

The median analyst price target for the stock is $200, with 14 of 28 analysts rating it a "strong buy" or "buy" and the rest rating it a "hold," according to Thomson Reuters data.

NOT BUYING EUROPE

One thing Buffett is not buying is European banks.

Buffett comes up whenever there is talk of a large European bank needing to raise capital, particularly in the current environment of writedowns on sovereign debt.

But he told CNBC that he would need to understand European banks better before investing, and that he has not yet seen an investment opportunity there in which he wants to take part.

The "Oracle of Omaha" and Berkshire Hathaway chief executive said he expects Europe's economy to show improvement 10 years from now, but getting there will be difficult.

In a three-hour interview, Buffett also disclosed that he was interviewed by the U.S. Securities and Exchange Commission in June about David Sokol, his former heir apparent who left Berkshire amid scandal earlier this year.

Sokol left the company after it emerged he had bought shares in Lubrizol while trying to convince Buffett to acquire it.

Buffett said he had an informal interview with the SEC, which was not a deposition and was not transcribed by a court reporter. He told CNBC the SEC had questions it wanted answered, and he and Berkshire were cooperating.

The Sokol episode turned into a major scandal for Berkshire earlier this year, with Buffett conceding at the company's annual meeting that he had handled the matter poorly. (Reporting by Ben Berkowitz in New York, additional reporting by Nicola Leske in New York and Jim Finkle in Boston; Editing by Tiffany Wu and Gerald E. McCormick)

Jittery European credit markets also hurt sentiment in Asia, sharply widening the spreads on the iTraxx Asia ex-Japan investment grade index -- a gauge of investor appetite for risk. The spread was about 10 basis points wider on Tuesday.

MSCI's broadest index of Asia Pacific shares outside Japan fell 0.5 percent, tracking a drop in global equity markets the previous day, while Japan's Nikkei stock average .N225 fell 0.4 percent.

"Italy can't find buyers to finance its debt, as fears over high price volatility in Italian bonds and speculators hitting shares of banks with huge exposure to Italy have made European financial institutions, traditionally long-term investors, wary of purchases," said Takashi Nakagawa, a senior credit analyst at Daiwa Capital Markets.

Italy sold 3 billion euros ($4.1 billion) of five-year bonds at 6.29 percent on Monday, a euro-era record, fuelling worries the high borrowing costs would derail the country's efforts to slash its 1.9 trillion euro worth of debt.

Yields on benchmark Italian 10-year bonds climbed to 14-year highs of around 7.5 percent last week before Prime Minister Silvio Berlusconi stepped down.

Italy's 10-year bond yields rose to 6.76 percent on Monday, also pushing Spanish 10-year yields above 6 percent for the first time since the European Central Bank started to buy the country's bonds in August.

The spread, or interest rate gap, of Italian bonds over German government bonds remained just below 500 basis points.

"Global financial markets are facing a key pivotal point," said Barclays Capital analysts in a research note.

"A further escalation of the European debt crisis is putting at risk the nascent stabilization of global growth and the associated buoyancy of risky assets outside of Europe," they said, adding the European authorities could limit the damage through more involvement of the European Central Bank.

But Bundesbank President Jens Weidmann on Monday rebuffed such global pressure for the ECB to become a lender of last resort, saying it could undermine the central bank's hard-won credibility.

CAPITAL BOOST

Sharp downturns in financial markets have raised the urgent need for recapitalization at banks, prompting them to sell assets to make up for losses elsewhere.

Hong Kong's Hang Seng index .HSI fell 0.7 percent, with China Construction Bank Corp (0939.HK) dragging the market lower. Shares in CCB fell 2 percent on Tuesday after Bank of America (BAC.N) decided to sell most of its remaining stake in the Chinese lender to shore up its capital.

There was better news in Chinese debt markets, with the city of Shanghai attracting very strong demand as it became the first local government to sell debt directly into the market, signaling keen investor interest in the new type of instrument.

After Shanghai's inaugural sale, the southern province of Guangdong plans to issue 6.9 billion yuan in bonds on Friday.

Financial market turmoil stemming from the euro zone sovereign debt crisis has taken a clear toll on the region's economy, with investors seeking clues over whether the euro zone could face a recession.

Later on Tuesday, the first estimate of euro-area gross domestic product for the third quarter will be published, following the region's industrial production data released on Monday, which showed a 2 percent decline in September.

The slide was the biggest fall since February 2009, and pointed to a sharp contraction toward the end of the year and a growing threat of a fall into recession.

Leadership changes in Italy and Greece failed to dispel market worries about their ability to resolve the debt crisis,

putting a firm cap on the single currency against the dollar.

The euro traded at $1.3626 on Tuesday, after falling as low as $1.3590 on Monday, when it broke below support at its 100-week moving average around $1.3638.

The currency was expected to find support around the low in September around $1.3360, while resistance was seen near $1.3870, a November high, technical analysts said.

(Editing by Alex Richardson)