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Stocks Fall Under Fiscal Cliff Pressure

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Stocks Take a Tumble

Courtesy: CNN

NEW YORK (CNNMoney) –

U.S. stocks opened lower Friday, as lawmakers fumble to find a solution to the fast-approaching fiscal cliff.

The S&P 500, the Dow, and the Nasdaq were down between 0.5% and 0.6%, as fears grow about the impact of no deal.

The uncertainty has taken a toll on markets. Stocks have sold off for four straight sessions as hopes for a substantial budget agreement have diminished, and all three indexes are on track to end December in the red.

President Obama and congressional leaders will discuss the impasse at the White House Friday afternoon, and the House of Representatives will return on Sunday. Investors worry that failure to reach a fiscal cliff deal could push the U.S. economy into recession.

Investors are hoping that leaders will at least be able to reach some sort of breakthrough that will postpone at least some of the automatic tax hikes and spending cuts due to take effect on Jan. 1.

“A lot of people are thinking about capital gains consequences and holding positions beyond this year,” said Mark Helweg, founder of financial tech company MicroQuant..

Shares of Citigroup, Wells Fargo, Bank of America and JPMorgan Chase all declined in early trading. Bank stocks were among the biggest drags on the market Thursday.

Stocks ended slightly lower yesterday, as news that of Sunday’s House meeting sparked a rebound in the last hour of trading, causing the Dow to recover from a 151-point loss.

While fiscal cliff talks will dominate investor attention, several other economic reports will also be in focus. Reports on the Chicago purchasing managers index and pending home sales are due out shortly after the markets open.

Shares of Hewlett-Packard fell after the company announced that the Department of Justice is investigating possible accounting fraud at Autonomy. After acquiring Autonomy for $11 billion last year, HP took an $8 billion write-down related to the acquisition this year.

European markets edged higher in morning trade on hopes of a fiscal cliff deal. Meanwhile, Italy sold 3 billion euros in 10-year government bonds Friday morning.

Asian markets ended stronger. Japan’s Nikkei, which will be closed on Monday, ended the year up more than 20%. The Nikkei’s recent strong run comes as the yen has been weakening on the prospect of further monetary easing. The Shanghai Composite posted further gains and is poised to end the year in the black.

The U.S. dollar rose against the euro, but dropped against the British pound and the Japanese yen.

The yield on the 10-year Treasury note moved up slightly to 1.71%. Oil prices were modestly higher, while gold moved down more than 2%

The-CNN-Wire/Atlanta/+1-404-827-WIRE(9473)
™ & © 2012 Cable News Network, Inc., a Time Warner Company. All rights reserved.

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