Fiscal cliff warning sends stock market lower

Traders came back to work on Monday after the Thanksgiving weekend to the same old worries about the fiscal cliff and the European debt crisis.

The stock market fell in midday trading as Washington lawmakers and business groups bickered over the proper rates for taxing and spending. In Europe, leaders tried to cobble together another bailout loan for Greece.

The Dow Jones industrial average was down 91 points at 12,919 as of noon. The Standard & Poor's 500 was down eight at 1,401 and the Nasdaq composite index slipped seven points to 2,960.

Overall it was a quiet morning, with no major economic reports due in the U.S. and no major companies scheduled to make big announcements.

"The themes seem about as recycled as Thanksgiving turkey," David Kelly, chief global strategist at JPMorgan Funds, wrote in a note to clients. He expected a better read on the economy later this week, with reports on consumer confidence on Tuesday and unemployment claims and third-quarter economic growth on Thursday.

Scott Carmack, co-portfolio manager at Leader Capital in Portland, Ore., said the decline was all but inevitable given how the market soared last week. It was one of the best weeks for the Dow all year and followed four weeks of decline. Positive economic news from Germany and China, as well as initial reports Friday that holiday shopping had gotten off to a strong start helped push the market higher.

That made Monday a good day to cash out on last week's gains, Carmack said, especially because traders aren't sure how the fiscal cliff will affect the market for the rest of the year.

"Monday is a good day to take profits," Carmack said. "No one was in on Friday, so they're doing it Monday."

It's still difficult to gauge how this holiday shopping season will wind up for retailers, who rely heavily on the Christmas season. The National Retail Federation reported that 247 million shoppers visited stores and shopping websites during the long Thanksgiving weekend, up 9 percent from a year ago. They spent an average of $423, up 6 percent.

Some worry that the momentum won't last. Retailers like Macy's, Target and Saks were down in early trading. Macy's fell $1.55 to $40.17. Saks was down 41 cents to $10.11. Abercrombie & Fitch was an exception, rising 37 cents to $44.77.

Blame the disconcerting overhang of the fiscal cliff. That's when both higher taxes and cuts to government programs, like unemployment benefits and Social Security, will kick in at the end of the year unless Congress and the White House work out a compromise before then.

A government report released Monday warned that a sudden increase in taxes would crimp the spending of middle class families next year, and some analysts wondered if the uncertainty might hurt spending earlier, throughout the rest of the holiday season.

The report, by President Barack Obama's National Economic Council and his Council of Economic Advisers, estimated that a married couple earning between $50,000 and $85,000 with two children would see a $2,200 increase in their taxes.

To be sure, the fiscal cliff fighting could be mostly grandstanding. Lawmakers often fight over budget issues until the 11th hour, then work out a compromise at the last moment.

In Europe, leaders of European Union countries engaged in their own battle, trying to hammer out a deal to lend more money to debt-crippled Greece. But ailments in Greece no longer sicken the U.S. markets as readily as they used to, as many analysts have already baked European problems into their market estimates.

Anda sedang membaca artikel tentang

Fiscal cliff warning sends stock market lower

Dengan url

https://kapalnelayanto.blogspot.com/2012/11/fiscal-cliff-warning-sends-stock-market.html

Anda boleh menyebar luaskannya atau mengcopy paste-nya

Fiscal cliff warning sends stock market lower

namun jangan lupa untuk meletakkan link

Fiscal cliff warning sends stock market lower

sebagai sumbernya

Kapal Nelayan