Stocks were flat on Friday as politicians remained at odds about how to settle the looming federal requirements for tax increases and spending cuts.
Trading has been choppy in the last two weeks as investors react to statements from policy makers on the state of discussions on how to avert a fiscal stalemate, which many economists say could pull the economy back into recession.
The Standard Poor’s 500-stock index was up 0.29 percent in November even as it suffered a slide of more than 6 percent from the month’s high to its low.
“Given the on-again-off-again ‘fiscal cliff,’ it’s rather surprising how resilient this market has been,” said David Rolfe, chief investment officer at Wedgewood Partners in St. Louis.
“Between now and the end of the year, there’s going to be an information vacuum outside the fiscal cliff, and I believe that resiliency will be tested.”
In contrast to the apparent calm in equities, the CBOE Volatility Index, a gauge of market anxiety, jumped 5.4 percent, its largest daily gain in two weeks.
The VIX also rose for the week, but posted a 14.7 percent decline for November.
On Friday, President Obama said a “handful of Republicans” in the House of Representatives were holding up legislation to extend tax cuts for middle-class Americans to try to preserve them for the wealthy.
Speaking shortly after the president, the House speaker, John Boehner, Republican of Ohio, said: “There is a stalemate; let’s not kid ourselves.”
Despite the divisive language, many market participants are betting that a deal will be struck — if only at the 11th hour.
Corporations continue to react to what is expected to be a higher tax burden next year. Whole Foods Market was the latest to announce a special cash dividend, of $2 a share, ahead of expected higher tax rates in 2013.
On Friday, the Dow Jones industrial average rose 3.76 points, or 0.03 percent, to 13,025.58. The S. P. 500 rose 0.23, or 0.02 percent, to 1,416.18. But the Nasdaq composite index dipped 1.79 points, or 0.06 percent, to 3,010.24.
For November, the S. P. 500 rose 0.29 percent, its smallest monthly change since March 2011. The Dow fell 0.5 percent and the Nasdaq gained 1.1 percent.
For the week, though, all three major stock indexes advanced, with the Dow up 0.1 percent, the S. P. 500 up 0.5 percent and the Nasdaq up 1.5 percent.
VeriSign shares dropped 13.2 percent to $34.15 after the company said the Commerce Department approved its agreement with ICANN to run the dot-com Internet registry, but VeriSign won’t be able to raise prices as it did before.
Stock in Yum Brands, the parent of the KFC, Taco Bell and Pizza Hut chains, slid 9.9 percent to $67.08 a day after the company forecast a decline in fourth-quarter sales at established restaurants in China.
After maintaining a close relationship for several years, Facebook and Zynga revised terms of a partnership agreement, according to regulatory filings. Now, Zynga, creator of the FarmVille online game, will have limited ability to promote its site on Facebook. Zynga’s stock fell 6.1 percent to $2.46. Facebook’s stock gained 2.5 percent to $28.
Apple’s latest iPhone received final clearance from Chinese regulators, paving the way for a December introduction in a highly competitive market. Its stock fell 0.7 percent to $585.28.
Interest rates were steady. The Treasury’s benchmark 10-year note rose 2/32, to 100 4/32, and its yield was unchanged at 1.61 percent.
Article source: http://www.nytimes.com/2012/12/01/business/daily-stock-market-activity.html?partner=rss&emc=rss
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