Stocks rebound from 'fiscal cliff' worries
The Dow ends down 18 points after falling as many as 151. The catalyst: News that the House will meet Sunday to discuss the fiscal cliff dispute. Apple leads the rebound. Jobless claims fall, but consumer confidence sags.
Stocks stormed back from sharp losses Thursday on news that the House of Representatives will convene Sunday evening in an attempt to end the nation's bitter budget dispute.
While the major averages suffered their fourth losses in a row, the big rebound was welcome news after Senate Majority Leader Harry Reid, D-Nev., had said earlier that a resolution to the "fiscal cliff" fight before Jan. 1 appeared unlikely because Republicans wouldn't cooperate.
After Reid made his comments, the Dow Jones Industrial Average ($INDU) fell to a loss of as many as 151 points and dropped under 13,000 for the first time since Dec. 4.
With the news on the House Sunday session, the blue chips rebounded to 13,096, down 18 points on the day. The Standard & Poor's 500 Index ($INX) was off 2 points to 1,418, and the Nasdaq Composite Index ($COMPX) dropped 4 points to 2,986.
If a deal can't be struck between Democrats and Republicans, an $800 billion combination of tax increases and federal spending cuts will kick in, which could set off a new recession. When the "fiscal cliff" provisions would kick in not clear. It looks like March.
The idea that no one would even try to address the budget dispute was unsettling to those on Wall Street actually working. Typically, volumes are down between Christmas and New Year's.
At the same time, an even nastier battle is looming on raising the nation's debt ceiling. The ceiling technically will be reached by Monday, Treasury Secretary Tim Geithner wrote to Congressional leaders late Wednesday, but the Treasury has the flexibility to keep the government operating until probably March 1.
"I have to be very honest," Sen. Reid said as the Senate convened Thursday in an unusual session between Christmas and New Year’s Day. "I don't know time-wise how it can happen now."
Reid offered his pessimistic assessment shortly before President Obama, cutting his vacation short, arrived back in Washington on Air Force One. White House officials said that before leaving Hawaii, the President had spoken separately by phone with each of the four Congressional leaders about the status of negotiations, but they gave no details of the discussion.
'Fiscal cliff' sets off a sell-off and a rebound
Since the November elections, the stock market has moved up or down depending on if investors believed a budget deal might be coming together. Thursday was another one of those days.
The S&P 500 had been down as many 18 points and nearly fell below 1,400 on an intraday basis for the first time since Nov. 28; it hasn't closed under 1,400 since Nov. 27. The Nasdaq had been down as many as 39 points.
The Nasdaq-100 Index ($NDX), which tracks the largest Nasdaq stocks, had dropped as many as 38 points in the early afternoon but recovered to 2,633, a loss of 4 points.
Apple (AAPL), which has the largest weight in the index, had recovered entirely from a tumble down to $505.60. It closed up $2.06 to $515.06. For Apple's shares, $505 has emerged as a key support level.
Economy appears held back by budget fight
The pessimism about the "fiscal cliff" came as the Conference Board said the budget debate caused consumer confidence to fall more than forecast in December.
The Conference Board's index of sentiment fell to 65.1 from a revised 71.5 reading for November. The gauge was projected to fall to 70, according to the Bloomberg survey median.
And there were indications that the holiday shopping season fizzled at the end as consumers worried about what might happen starting in January.
There was some good news Thursday: New-home sales were up 4.4% in November from October to a seasonally adjusted 377,000 units. The sales rate was the best since April 2010 and was up 15.3% from November 2011. Homebuilding shares, however, were lower.
At the same time, initial jobless claims fell to 350,000 in the week ended Dec. 22. The week before, claims were at a seasonally adjusted 362,000. Claims have recovered from an uptick after Superstorm Sandy.
December and the year struggles to a close
Not only did the market fall for a fourth straight day, it was down for the fifth day in the last six. If the market ends the month at current levels, the Dow will be up 0.5%. The S&P 500 will be up 0.1%, with the Nasdaq down 0.8%. Apple is weighing on the Nasdaq.
For the year, the Dow is up 7.2% with the S&P 500 up 12.8% and the Nasdaq up 14.6%.
Only three of the 30 Dow stocks were higher: MSN Money publisher Microsoft (MSFT), UnitedHealth Group (UNH) and Wal-Mart Stores (WMT). The Dow's weak links were Cisco Systems (CSCO), Alcoa (AA) and JPMorgan Chase (JPM).
Meanwhile, 188 S&P 500 stocks were higher, along with 32 Nasdaq-100 stocks.
Crude oil (-CL) settled down 11 cents to $90.87 a barrel in New York but is still up 2.5% this week. The retail price of gasoline was up 1.4 cents to $3.261 a gallon, according to AAA's Daily Fuel Gauge Report.`
Gold (-GC) was up $3 to $1,663.70 an ounce. Interest rates fell as investors sought safety. The 10-year Treasury yield fell to 1.715% from Wednesday's 1.758%.
More from Money Now
- $89K a month until age 60
- The market's winners and losers of 2012
- Should stranded adventurers pay for own rescue?
Old Geezer: This is exactly the kind of rhetoric that adds to the problem. As long as we
keep calling each other names we can't expect much progress. Our nation was founded on
compromise. If Alexander Hamilton and Thomas Jefferson had descended to this level we
wouldn't even be a nation. They were farther apart philosophically than today's
MY RESPONSE TO JEB47:
YOU ARE AN IGNORANT FOOL!!!!! DO YOU CALL LOADED MUSKETS COMPROMISE?????!!!!!!
OUR COUNTRY WAS FOUNDED WITH BULLETS FLYING. WHERE'D YOU GET YOUR SCHOOLING???
Wall street is not "falling for it". They are a part of it. This country is run by the super-rich.
End of story!
LET ME MAKE THIS PERFECTLY CLEAR. CONGRESSMEN ARE USING THEIR POWER TO MANIPULATE THE MARKETS FOR PROFIT. WHY FIX THE PROBLEM WHEN YOU CAN QUICKLY MAKE MORE THAN A YEARS PAY BY MOVING THE MARKETS? IT'S BEEN GOING ON FOR A WHILE NOW. MOSTLY BOEHNER & REID BUT YOU KNOW THAT MOST OF THEM ARE RAKING IN PROFITS FROM IT.
THIS MORNING, REID SET UP THE MARKET FOR A MAJOR BEAR ATTACK. THEN, JUST AS I
HAD PREDICTED, THEY CAME OUT WITH SOMETHING "POSITIVE" IN THE AFTERNOON TO
SQUEEZE THE SHORTS AND MAKE INSTANT MONEY (WITHOUT WORKING-JUST THE WAY THEY LIKE IT! JUST ANOTHER ANCILLARY BENEFIT OF BEING IN CONGRESS). THEY ARE
GOING TO DO WHAT THEY ARE GOING TO DO BUT, WHY NOT MILK IT FOR ALL IT'S WORTH?
THESE ARE NOT PUBLIC SERVANTS. THEY ARE "SELF SERVANTS"! OPEN YOUR EYES!
The fiscal cliff is all "priced in." So are higher taxes for every one. So are cuts in defense spending, social security, medicare, medicaid. So are huge cuts to unemployment insurance and relief programs like school lunch (breakfast and dinner now)
Going over the fiscal cliff means nothing to our irresponsible and feckless politicians. Going over the cliff will be instituting an austerity plan starting the first of the year. If going off the fiscal cliff sends the country back into recession (live we ever left in the first place), our politicians don't are. It doesn't effect them getting their paychecks or givng themselves raises. It doesn't effect their pensions plans (that the American taxpayer pays for). Nor does it effect their gold-plated health insurance and health care programs (again all paid for by you know who).
Most of us can't get to washington dc for a protest march. What we can do is let our representatives know that failure to reach a realistic, effective plan for addressing our budget crisis will result in our not voting for them in the next election cycle - makes no difference what their party affiliation is. Blind allegiance at the expense of this Country's economic future makes no more sense than the polarized, ineffective congress that represents us.
It really is a time for term limits, "replacement of the entire House and Senate" and the creation of a centralist 3rd party.
The TEA party fascist are screwing us on the cliff problem.Congress wil get a 6
or 12 month fix.It`s a lame quick fix.
"Ask not what your country can do for you , but what you can do for your country". Now! its, " Ask what the country can do for you, but what I cannot and will not do for my country"! We became a society of wants!! Thanks to Obama!!!
The Republican, Neo-Con. Libertarian and Tea Party Fascists plans to take over America will never succeed as long as all us vigilant, just and patriotic Democrats are there to STOP you.
It will NEVER happen under our watch!
God bless Freedom, Prosperity and Justice for all in America!
P.S. DIE WALL STREET, DIE!
The FEDS are pumping the market hard to day! Don't be fooled by this turn around. There is no way they are going to come to any kind of agreement in Washington. It's not in these guys to worry about the American people.
Copyright © 2014 Microsoft. All rights reserved.
Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.
[BRIEFING.COM] The major averages began the new trading week on a slightly lower note with small caps leading the weakness. The Russell 2000 shed 0.3% while the S&P 500 slipped less than a point with six sectors ending in the red.
Equity indices began the day in negative territory with only the Nasdaq (-0.04%) making a very brief appearance in the green. After sliding through the first hour of action, the major averages reversed and spent the remainder of the session climbing off ... More
More Market News
Like many companies this winter, the fast-food giant blamed a drop in same-store sales on the weather. But could its problems be bigger than a snowbank?
MUST-SEE ON MSN
- Video: Easy DIY smoked meats at home
A charcuterie master shares his process for cold-smoking meat at home.
- Jetpacks about to go mainstream
- Weird things covered by home insurance
- Bing: 70 percent of adults report 'digital eye strain'