| The Fiscal Cliff Impasse Sparks a 1% Selloff On Wall Street |
| Dec-21-2012 |
| Keywords: stocks, lower, fiscal cliff, plan b, |
Wall Street investors today balked at the fiscal cliff impasse in Washington.
The Dow Jones Industrial Average lost 121 points on the day. The Nasdaq Composite dropped 29 points. The S&P 500 finished with 14 point loss.
Despite today's selloff all three indexes ended the week higher. The Dow rose 0.4%. The Nasdaq and S&P 500 each finished with better than 1% gains.
Today's selling pressure was ignited by Speaker Boehner's failure to muster enough support from conservatives to a call a vote on his back up plan.
Late Thursday, in a last minute change of direction, Boehner issued a statement saying the vote wouldn't take place, calling on President Barack Obama and Senate Majority Leader Harry Reid to offer a solution.
The market today is also reacted to mixed news on the economy. The Commerce Department reported that orders for last month increased a better than expected 0.7 percent. Excluding the transportation, orders jumped 1.6%, topping estimates of a 0.2% decline.
Consumer spending rose 0.4% in November, a slightly larger increase than the 0.3% economists had forecast. Gains in personal income were also stronger than expected, up 0.6%, marking the steepest monthly gain since February.
The news on consumer confidence was not nearly as good. The Reuters/University of Michigan reading of consumer sentiment in December sank to 72.9. The steeper than expected decline is being blamed on rising anxiety over the fiscal cliff impasse.
Bank of America led decliners on the blue chip index, B of A fell 2% on the day.
Research in Motion turned out to be a huge drag on the technology sector. RIMM plunged 23% despite topping quarterly earnings and revenue targets. Investors instead focused on the company's first-ever drop in its subscriber base. Investors were also uncomfortable with RIMM's vagueness regarding how revenues would be impacted by the launch of its new Blackberry 10 platform next month.
The dollar, gold and U.S. debt proved beneficiaries of safe haven buying spurred by the fiscal cliff impasse. Traders bid up the price of the U.S. 10-year Treasury note, pushing the yield on the benchmark Treasury note to 1.76%.
A five-day winning streak in the crude oil market comes to an end. The February crude oil contract ended the session down more than 1.6%, settling at $88.66 a barrel. |
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Posted by Lou Dobbs Staff at 8:00 PM Email to a friend |
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