The Standard Poor’s 500-stock index ended its six-day winning streak Thursday, retreating as worries intensified that Washington’s fiscal negotiations were dragging on with little progress.
Anxiety about the talks between Democrats and Republicans was enough to offset encouraging data on retail sales and jobless claims.
Investors are concerned that tax increases and spending cuts, set to begin in 2013 if a deal is not reached in Washington, will hurt growth. The stock market had taken the heated talk in stride lately, but downbeat remarks from the House speaker, John A. Boehner of Ohio, prompted some selling Thursday.
Mr. Boehner accused President Obama of “slow walking” the economy toward the automatic tax increases and spending cuts that will occur on Jan. 1, 2013, if no deal is reached. He was scheduled to meet with Mr. Obama later on Thursday.
“There is no conviction here and Boehner’s comments — as harsh as they were — were realistic,” said Jason Weisberg, managing director at the Seaport Securities Corporation in New York.
“The fiscal cliff is already built in,” Mr. Weisberg said. “That being said, people don’t like to be told the apocalypse is coming over and over and over again. The real players in this market have already closed their books.”
After nearing a 1 percent decline for the day, the S. P. 500 pared losses late in the session. The index had posted six consecutive sessions of gains through Wednesday, and at one point Wednesday, the S. P. 500 touched its highest intraday level since Oct. 22.
While the Federal Reserve’s announcement on Wednesday of a new round of economic stimulus bolstered stocks, Chairman Ben Bernanke’s comments that monetary policy would not be sufficient to offset the impact of the fiscal crisis weighed on sentiment.
The Dow Jones industrial average tumbled 74.73 points, or 0.56 percent, to 13,170.72 at the close. The S. P. 500-stock index fell 9.03 points, or 0.63 percent, to 1,419.45. The Nasdaq composite index slid 21.65 points, or 0.72 percent, to end at 2,992.16.
Apple’s stock, down 1.7 percent at $529.69, was among the biggest drags on the Nasdaq, while I.B.M., down 0.5 percent at $191.99, was among the biggest weights on the Dow. A federal jury in Delaware Thursday found that Apple’s iPhone infringed on three patents owned by MobileMedia Ideas.
Among the day’s biggest gainers, Best Buy shares shot up 15.9 percent to $14.12 after a report that the company’s founder, Richard M. Schulze, was expected to offer to buy the consumer electronics retailer this week.
The energy and information technology sectors were the S. P.’s weakest performers, with the S. P. energy index declining 0.9 percent. Shares of the American refining company Phillips 66 lost 1.6 percent to $52.21.
The day’s data sent some positive signals on the economy, with weekly claims for jobless benefits dropping to nearly the lowest level since February 2008, and retail sales rising in November after an October decline, improving the picture for consumer spending.
In Europe, European Union finance ministers reached agreement to make the European Central Bank the bloc’s top banking supervisor, which could increase confidence in the ability of European Union leaders to confront the euro zone’s sovereign debt crisis.
The Treasury’s 10 year note fell 9/32 to 99 1/32, with the yield rising to 1.73 from 1.70 on Wednesday.
Article source: http://www.nytimes.com/2012/12/14/business/daily-stock-market-activity.html?partner=rss&emc=rss
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