U.S. Stocks Stall Ahead Of Budget Talks
U.S. stocks finished nearly unchanged Monday, with the market treading water before talks to head off automatic spending cuts and tax hikes that would begin in January.
“Unlike monetary policy which seems pretty certain, fiscal policy is the great unknown. In the short term, the clock is ticking on the fiscal cliff,” said Andrew Fitzpatrick, director of investments at Hinsdale Associates.
The uncertainty of whether politicians would reach an agreement and avoid more than $600 billion in automatic tax hikes and spending cuts otherwise set to take place in January was expected to keep equities on a volatile ride until an accord is reached.
U.S. stocks fell the most in five months last week as investors turned to newly re-elected President Barack Obama’s budget standoff with the Republican-majority House of Representatives.
“This has the capability to lead to recession as growth in the economy could stall. Early signs are encouraging as both Obama and [House Speaker John] Boehner have a least expressed some willingness to compromise,” Fitzpatrick added.
On Monday, the benchmark indexes fluctuated between mild gains and losses before finishing a low-volume Veterans Day session almost unchanged.
The Dow Jones Industrial Average lost 0.23 points at 12,815.16.
The S&P 500 Index added a fraction to 1,380.00, with telecommunications the best performing and utilities the greatest decliner of its 10 major sectors.
Best Buy Co. gained 3.6% after the consumer-electronics chain said former Williams-Sonoma executive Sharon McCollam will become its new chief financial officer in December.
The Nasdaq Composite Index shed just more than half a point to 2,904.26.
Decliners edged just ahead of advancers on the New York Stock Exchange, where a measly 292 million shares traded. Composite volume topped 2.5 billion.
The U.S. dollar held steady against other currencies, including the euro .
The price of oil fell, with crude futures for December delivery losing 50 cents to end at $85.57 a barrel in New York.
In Paris Monday, the International Energy Agency said U.S. oil output is positioned to exceed that of Saudi Arabia’s in the next decade, putting the U.S. on track to become a net exporter.
The U.S. Treasury market was closed, along with government offices, for the Veterans Day holiday.
Jefferies Group Inc. rallied after Leucadia National Corp. said it would buy what remained of the investment bank that it does not already own.
Titanium Metals Corp. jumped after Precision Castparts Corp. said it would buy the melted-products manufacturer.
During the weekend, a report had China’s export growth rising to a five-month high above 11%, topping estimates and adding to recent data that signal a possible end to seven straight quarters of slowing.
“The good news is there is some good news coming out of China. Since 2010, the Three Horsemen of the Apocalypse have been a double-dip recession in the U.S., a financial meltdown in Europe and a hard landing in China,” said Ed Yardeni, chief investment strategist at Yardeni Research Inc.
In Brussels Monday, euro-area finance ministers gathered, with financial aid to Greece on the table.
The Greek parliament on Sunday approved an austerity budget for 2013, a move required to release the next round of financial aid from the European Union and International Monetary Fund.
Marketwatch
