Wall Street Stutters

By the close, the Standard Poor’s 500-stock index was up less than a point and the Dow Jones industrial average added about a point. The Nasdaq composite index lost less than a point.

Trading volume was light, with the American bond market and government offices closed for the Veterans Day holiday.

The S.P. 500 fell 2.4 percent last week, the worst week for the index since June, partly propelled by concerns over the government spending cuts and tax increases set to go into effect early next year unless Congress acts to change the law before then. Though most consider it unlikely that no deal will be reached, analysts fear going over the combination could push the economy back into recession.

“If the ‘cliff’ were to occur, it would be very devastating for the economy, which is why it is hard to think that last week was much of an overreaction,” said Oliver Purshe, president at Gary Goldberg Financial Services in Suffern, N.Y., adding that the odds of Congress and the president failing to reach a deal were “very low.”

Data over the weekend showed that China’s export growth climbed to a five-month high, above 11 percent, beating expectations and adding to recent data suggesting the country’s seven straight quarters of slowing economic growth have ended.

“Any bit of positive news from China will swing things upward here,” Mr. Pursche said. “There’s a little bit of pent-up desire to bounce back today.”

Also overseas, the Greek parliament approved an austerity budget for next year, a necessary step to unblock a new tranche of credit from the European Union and International Monetary Fund before the government runs out of cash. Still, investors remain concerned about whether the European Union and the monetary fund will agree to send the next tranche.

European stocks closed mixed, with the DAX index in Frankfurt up 0.1 percent and the CAC 40 in Paris down 0.4 percent.

In the United States, the homebuilder D.R. Horton reported fourth-quarter earnings that beat expectations, helped by a jump in orders. Shares fell 5.3 percent.

According to Thomson Reuters data through Friday, 63.3 percent of the 449 companies in the S.P. 500 that have reported earnings have topped expectations, but only 38.2 percent of companies have topped revenue expectations, well below the 62 percent average since 2002.

Wall Street stocks rose on Friday, helped by strong consumer sentiment data, but it hardly made a dent in the week’s losses.

Article source: http://www.nytimes.com/2012/11/13/business/daily-stock-market-activity.html?partner=rss&emc=rss