MARKET SNAPSHOT: U.S. Stocks Swing Up And Down In Cliff Watch
12/06/2012| 02:12pm US/Eastern
By Kate Gibson, MarketWatch
NEW YORK (MarketWatch) -- U.S. stocks churned between modest gains and losses Thursday, with an optimistic forecast from Broadcom Corp. bolstering technology shares as investors watched fiscal-cliff negotiations.
"It feels like this is going to be a long afternoon. I'm sitting on the edge of my seat waiting for the next rumor, hint of compromise or anything else that comes out of Washington," commented Elliot Spar, market strategist at Stifel Nicolaus, in an emailed note.
"I think this will get resolved, if not by end of the year, by early 2013," Gus Faucher, senior economist at PNC Financial Services Group, said of the automatic steep spending cuts and tax increases slated to begin in January.
The standoff appears to be weighing on business confidence, but "on the other hand consumers don't appear terribly concerned," said Faucher of recent data illustrating consumer sentiment at multiyear highs.
Rising as much as 31 points and falling as far as 26 points, the Dow Jones Industrial Average (DJI) was lately up 11.44 points, or 0.1%, at 13,045.93, with computer-chip maker Intel Corp. (>> Intel Corporation) leading gains among its 30 components.
Intel CEO Paul Otellini, who is retiring in May, on Wednesday said his successor would likely be chosen from inside the company.
The S&P 500 index (SPX) rose 2.94 points, or 0.2%, to 1,412.22, with technology the best performing and industrials the worst of its 10 major industry groups.
Broadcom's (>> Broadcom Corporation) shares rose 1.9%, a day after the chip manufacturer projected fourth-quarter revenue at the upper end of its target range.
Akamai Technologies Inc. (>> Akamai Technologies, Inc.) rallied 9.2% on news that it would jointly sell services with AT&T Inc. (T).
Shares of Safeway Inc. (>> Safeway Inc.) jumped 3.7% after the food-and-drug retailer joined other companies in accelerating its quarterly cash dividend to December to bypass a potential hike in dividend taxes if the fiscal-cliff issue remains in play at the end of the year.
The Nasdaq Composite (RIXF) climbed 15.75 points, or 0.5%, to 2,989.45.
Apple Inc. (>> Apple Inc.) shares reversed higher, lately up 1.7%, a day after shares of the consumer-technology company took their biggest single-day percentage hit since December 2008.
Decliners were just ahead of advancers on the New York Stock Exchange, where 317 million shares traded by 1:50 p.m. Eastern.
Composite volume neared 2 billion.
Oil prices fell to a one-week low after the European Central Bank reduced its growth expectations. Crude for January delivery dropped $1.89 to $85.99 a barrel in New York.
ECB President Mario Draghi told a news conference "weak economic activity is expected to continue into next year."
Treasury prices gained with the benchmark 10-year note's yield falling to 1.566%.
The fiscal-cliff drama does not seem to have investors particularly shaken, at least by one measure of Wall Street uncertainty. The CBOE Market Volatility Index (VIX) fell 3.9% on Thursday to 16.46.
The VIX closed at 26.66 -- its highest finish this year -- on June 1, after an anemic monthly jobs report came in under the gloomiest of expectations, ratting investors. The index has not finished above 20 since late July.
The Labor Department reported jobless claims fell by 25,000 to 370,000 last week to their lowest level in a month.
The weekly data is positive in that it shows the negative impact of the recent superstorm on the labor market to be a temporary one, said PNC's Faucher.
"Expectations were that this would happen, so it's in line with what markets were expecting," Faucher said of the market's muted reaction.
"It's certainly good news. After they rose about 90,000 in the wake of Hurricane Sandy, they are now back to where they were before, so it looks like there won't be any permanent impact from the storm," Faucher said.
The pattern is the same as during 2005's Hurricane Katrina, which was followed by a big spike in claims shortly after the storm hit, with the count of those filing for jobless benefits returning to pre-Katrina levels weeks later, Faucher said.
The weekly data come ahead of Friday's monthly nonfarm payrolls report, with the unemployment rate likely to hold at 7.9% for November.
On Wednesday, stocks mostly advanced, with the Dow Jones Industrial Average (DJI) rising 82 points, after Bloomberg News reported of Republican defections to a bipartisan effort on Capitol Hill to break the budget impasse.
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