European stocks inched lower in morning trade, retreating for only the second time in eight sessions as renewed worries over the pace of U.S. budget talks prompted investors to book a portion of their recent strong gains. .EU

Deep divisions at the Federal Reserve were on display on Tuesday, just two weeks before the U.S. central bank's next policy-setting meeting, with one top Fed official pushing for more easing, and another advocating limits.

U.S. retailer Costco Wholesale Corp (COST.O) is to pay a special dividend of $7.00, worth a total $3.0 billion to investors, it said when posting monthly same-store sales that beat forecasts.

Microsoft Corp (MSFT.O) has sold 40 million Windows 8 licenses in the month since the launch, according to one of the new co-heads of the Windows unit, setting a faster pace than Windows 7 three years ago.

Green Mountain Coffee Roasters Inc (GMCR.O) forecast quarterly and full year earnings well ahead of analysts' expectations, helped by an expanded lineup of single-serve coffee makers and drinks, sending its shares up 22 percent in after-hours trade.

Clothing maker PVH Corp (PVH.N) posted a bigger quarterly profit on Tuesday despite a slight drop in sales as its higher margin Calvin Klein and Tommy Hilfiger businesses grew faster, and its shares gained one percent in after-hours trade.

Defense contractor Lockheed Martin Corp (LMT.N) said Marillyn Hewson, set to become chief executive on January 1, would receive an annual base salary of $1.38 million and a target bonus percentage of 175 percent in 2013.

Advanced Micro Devices Inc (AMD.N) plans to sell and lease back its campus in Austin, Texas, to raise cash and fund its chipmaking business as it diversifies beyond the struggling PC industry into new markets.

Nokia (NOK1V.HE) said on Wednesday that an arbitrator has ruled in its favor in a patent dispute with BlackBerry-maker Research In Motion (RIM) RIM.RO over use of Nokia's patents related to wireless local access network (WLAN) technology.

Shares in energy drink maker Monster Beverage Corp (MNST.O) soared more than 13 percent on Tuesday on comments by the U.S. Food and Drug Administration that did not suggest any immediate action against makers of the caffeinated drinks, although the regulator will consider adding warnings and more information on the drink labels.

Jeff Zucker, a former head of NBCUniversal and the producer of Katie Couric's talk show, will be named president of Time Warner Inc's (TWX.N) ratings-starved CNN cable news channel, a source close to the situation said on Tuesday.

U.S. stocks slid on Tuesday in a choppy session, losing ground in the last hour before the close after Senate Majority Leader Harry Reid expressed disappointment that there has been "little progress" in dealing with the "fiscal cliff."

The Dow Jones industrial average .DJI fell 89.24 points, or 0.69 percent, to 12,878.13 at the close. The S&P 500 .SPX dropped 7.35 points, or 0.52 percent, to finish at 1,398.94. The Nasdaq Composite .IXIC lost 8.99 points, or 0.30 percent, to end at 2,967.79.

(Reporting by Blaise Robinson; Editing by Toby Chopra)

• A Permanent Economic Emergency