March 29, 2024

Wall Street Slides After Fiscal Setback

Stocks on Wall Street slumped Friday, depressed by the setback late Thursday in Washington on progress toward a budget deal.

By the close of trading, the Dow Jones industrial average had slid 121 points, or about 0.9 percent. The Standard Poor’s 500-stock index, a broader measure of activity, lost 0.9 percent as well, and the technology-heavy Nasdaq composite index slipped 1 percent.

“There’s such disarray about coming to a compromise even within the Republican Party,” said Doug Cote, the chief investment strategist for ING Investment Management. “The market just says, ‘They are not coming up with any feasible plan.’ ”

Trading volume was above the recent average as investors watched for developments in the political efforts to avoid a fiscal crisis. A Republican proposal to extend some lower tax rates was dropped Thursday night after G.O.P. leaders decided they did not have enough support to put it to a vote.

Shares had largely risen over the last two weeks as President Obama and the House speaker, John A. Boehner, inched forward with small concessions.

But Friday, the last full day of trading before Christmas, was also a day when certain stock options were scheduled to expire, adding to trading swings.

 Even with the day’s pullback, the Nasdaq index was up more than 15 percent for 2012 so far, the S.P. 500 had added 14 percent and the Dow was up 8 percent.

The markets fell despite a few more promising data points about the American economy. In November, personal income rose 0.6 percent, more than analysts projected, while orders for durable goods also came in better than expected, rising 0.7 percent, the government reported. 

Worries about the standoff in Washington also sent share prices down around the world, though less sharply than in the United States. Leading indexes were down 1 percent in Japan, 0.5 percent in Germany and 0.3 percent in Britain.

Oil futures fell about 1.5 percent in New York trading to $88.78 a barrel.

Wall Street will be closed on Tuesday, Christmas Day, but will be open for a half-day session on Monday.

Article source: http://www.nytimes.com/2012/12/22/business/daily-stock-market-activity.html?partner=rss&emc=rss

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