March 28, 2024

Shares Edge Up as Budget Concern Clashes With Strong Economic Data

Stocks advanced slightly on Friday but failed to avert the worst week for markets since June, as investors turned their attention from the presidential election to the coming negotiations over impending tax increases and spending cuts.

The market gave up some early gains after President Obama and House Speaker John Boehner, in separate public remarks, made it clear that partisan sparring over taxes and budget cuts to address the deficit would probably dominate the next several weeks.

The Standard Poor’s 500-stock index finished Friday’s session up 0.17 percent, but it fell 2.4 percent for the week, its worst performance since early June.

“At this point, there’s no election, and there’s nothing else that can distract. The junk has filtered out and the politicians will be forced to make a decision on the fiscal cliff,” said Chris Hobart, chief executive and founder of the Hobart Financial Group, an investment management and financial planning company in Charlotte, N.C.

Early in the day, new economic data showed that consumer sentiment was at its highest level in more than five years, according to the Thomson Reuters/University of Michigan surveys, and that wholesale inventories jumped in September, according to a Commerce Department report.

Shares of Walt Disney fell 6 percent to $47.06, dragging on the Dow industrials, after the company reported results late Thursday. The company said future results would be under pressure because of declining home video sales and rising costs.

Groupon’s shares sank 29.6 percent, to $2.76, a day after the daily deal company’s results fell short of Wall Street’s expectations.

The Dow Jones industrial average edged up 4.07 points, or 0.03 percent, to 12,815.39 at the close. The Standard Poor’s 500-stock index rose 2.34 points, or 0.17 percent, to 1,379.85. The Nasdaq composite index advanced 9.29 points, or 0.32 percent, to close at 2,904.87.

For the week, the Dow fell 2.1 percent and the Nasdaq lost 2.2 percent.

Tech stocks managed solid gains in Friday’s session. An S. P. information technology sector index rose 0.6 percent.

Shares of Apple rebounded from their slide into bear market territory this week with a 1.7 percent gain on Friday to close at $547.06.

But the stock of the retailer J. C. Penney slid 4.8 percent to $20.64 and was the S. P. 500’s biggest decliner after the company reported a sharper-than-expected decline in quarterly sales at stores open at least a year.

Investors may be reacting to the prospect of higher tax rates next year by selling both losing and winning stocks for the year to reduce the tax impact from their positions.

International Game Technology, a maker of slot machines, gained 5.2 percent to $13.50 after reporting better-than-expected fourth-quarter earnings.

Lions Gate Entertainment jumped 14.3 percent to $16.68 after reporting better-than-expected earnings of $75.5 million, helped by the studio’s blockbuster movie “The Hunger Games.”

Interest rates were steady. The Treasury’s benchmark 10-year note rose 2/32, to 100 4/32, from 100 2/32 late Thursday, and the yield slipped to 1.61 percent from 1.62 percent.

Article source: http://www.nytimes.com/2012/11/10/business/daily-stock-market-activity.html?partner=rss&emc=rss