Member access

4-Traders Homepage  >  News

News

Latest NewsCompaniesMarketsEconomy & ForexCommoditiesHot NewsMost Read NewsRecomm.Business LeadersVideosCalendar 

U.S. Stocks Fall in Late Trading Amid Ominous Fiscal Signs

12/28/2012 | 05:08pm US/Eastern

By Jonathan Cheng

U.S. stocks tumbled in late trading Friday as investors warily watched a late-afternoon White House meeting to possibly strike a deal to avert the so-called fiscal cliff.

The Dow Jones Industrial Average declined 127 points, or 1%, to 12967, putting it on pace for a fifth straight decline after giving up 215 points over the past four trading sessions. The Standard & Poor's 500-stock index lost 12 points, or 0.9%, to 1406, while the Nasdaq Composite slid 18 points, or 0.6%, to 2968.

Leading the declines were energy, materials and industrial stocks, on a day that saw all 10 of the S&P 500 sectors and all but one of the 30 Dow components in negative territory. Among the Dow's biggest decliners were Hewlett-Packard, Chevron and Exxon Mobil, which fell 2.6%, 1.7% and 1.8%, respectively.

The declines came in spite of a pair of economic reports that handily topped economists' expectations. The Institute for Supply Management's Chicago-area purchasing managers index for December came in at 51.6, beating estimates for a gain to 51.0. Pending-home sales in November, meantime, rose to their highest level in nearly three years; the monthly gain of 1.7% topped expectations for a 1.2% rise.

In Washington, President Barack Obama invited congressional leaders to the White House on Friday afternoon to try to hammer out a deal before sharp tax increases and spending cuts go into effect on Jan. 1 in what is known as the fiscal cliff. The House of Representatives isn't set to reconvene until Sunday evening.

Stocks momentarily pared some of their morning losses after a news report reiterating President Obama's plan to offer a scaled-back budget plan at the Friday afternoon meeting. But investors remained cautious on any imminent deal, and reports in late trading suggested that the two sides were still far apart on any deal.

"We're all waiting with bated breath, wondering what's going to happen," said Dan Peirce, a portfolio manager with State Street Global Advisors. "You're seeing intransigence on both sides. You hate to think we're in the kind of situation where markets have to get really, really ugly to induce a constructive response from federal leaders."

European markets traded broadly lower, with the Stoxx Europe 600 down 0.7%, as fears over a U.S. fiscal crisis and signs of continued economic contraction in the euro-zone kept investors on the defensive. A preliminary gauge of activity indicated the euro-zone economy looked set to contract for a third-straight quarter in the fourth quarter. France, meantime, revised its third-quarter growth estimate to 0.1% from 0.2%.

Separately, shares of Spanish lender Bankia tumbled 27% after an advisory committee of Spain's benchmark stock index, the IBEX 35, decided the lender would be excluded from the index as of Jan. 2. Spain's IBEX 35 slumped 1.8%.

Meanwhile, Asian markets continued to rally amid hopes that the Bank of Japan will implement more aggressive stimulus measures. Japan's Nikkei Stock Average ran up 0.7% to a 21-month high, and has surged 10% so far in December. China's Shanghai Composite climbed 1.2% to a six-month high.

Crude-oil futures slipped 0.1% to settle at $90.80 a barrel, while gold futures eased 0.5% to $1,654.90 an ounce. The dollar rose against the euro but fell against the yen. Demand for Treasurys gained, pushing the yield on the benchmark 10-year note down to 1.712%.

Among stock movers, Barnes & Noble climbed 5.5% after London-listed Pearson said it would invest $89.5 million in Nook Media, the bookseller's digital business. Pearson slipped 0.3%.

MagicJack VocalTec advanced 10% after the company, which provides voice-over Internet-protocol services, raised its quarterly earnings estimate and appointed a new chief executive.

Facebook slipped 0.5% after a report in the New York Post suggested Instagram, which Facebook acquired for $1 billion earlier this year, may have shed nearly 25% of its daily active users following a change in the photo-sharing app's privacy rules.

Write to Jonathan Cheng at jonathan.cheng@wsj.com

React to this article
Latest news
Date Title
06:18a DIGI : Global players laud Digi's Safe Internet leadership
06:18a CAME CAP : CAMBRIDGE CAPITAL ACQUISITION CORP : Other Events, Financial Statements and Exhibits (form 8-K)
06:18a Bank of England's next rate move is going to be up, says Carney
06:17a BIGLARI : Dissident shareholders fail to get key backing in Biglari Holdings board fight
06:17a PENNON : Scrip Dividend - Additional Listing - Amendment
06:17a SALZGITTER : Ilsenburger Grobblech GmbH books orders for more than 68,000 tons of plate for the offshore oil, gas and wind industry
06:17a EUROPEAN COMMISSION : Taxation: Commission refers Greece to Court regarding the inheritance tax treatment of bequests to non-profit organisations
06:17a ROSNEFT' NK : Rosneft and the Federal Anti-Monopoly Service Agreed on Price Formation Principles and Procedures for Oil product Sales in the Russian Federation
06:17a SAVILLS : Rooftop solar investment barriers eased thanks to DECC changes, says Savills Energy
06:17a AGA RANGEMASTER : brings the world’s best-loved cookers to the heart of the Chinese home
Latest news
Advertisement
Hot News 
JUDGES SCIENTIFIC : Profit Up But Like-For-Like Revenue Shrinks
MORPHOSYS : to Host Conference Call on Announcement Regarding the Termination of the Co-development and Co-promotion Agreement for MOR202
TOWER RESOURCES : Knows Of No Reason For Share Price Surge
CLOUDBUY : Partners With US Cloud-Based Provider, Gets First Deal
RED HAT : shares jump 10 percent
Most Read News
03/26 DEUTSCHE LUFTHANSA : EDITORIAL: The mystery of Germanwings Flight 9525
03/26 CANFOR : and Canfor Pulp Products Inc. Announces Annual General Meeting and First Quarter Results Conference Call
03/26 ENDURO ROYALTY : Provides Updated Tax Information
04:14a Switzerland's UBP to buy RBS's Coutts International
03/26 AMERICAN APPAREL : Ousted American Apparel chief seeks $40M over firing
Most recommended articles
06:15a Italy January retail sales gain 0.1 percent month-on-month
06:12aDJOil Falls, Gets Support From Yemen Conflict - Update
06:06aDJTurkey Passes Tough Security Law
06:06aDJChina, IMF to Strengthen Fiscal Policy Cooperation
06:05a European stocks head for biggest weekly fall of the year
Dynamic quotes  
ON
| OFF