Wall Street ends higher, but investors still weary
By Atossa Araxia Abrahamian | November 10, 2012 9:00 AM EST
Stocks advanced on Friday but failed to make up for what turned out to be the worst week for markets since June, as investors turned their attention from the presidential election to the coming negotiations over the "fiscal cliff."
The market gave up some early gains after President Barack Obama and House Speaker John Boehner, in separate public remarks, made it clear that partisan sparring would likely dominate the next several weeks.
The S&P 500 finished Friday's session up 0.17 percent, but it fell 2.4 percent for the week - the worst 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, CEO and founder of the Hobart Financial Group, an investment management and financial planning firm in Charlotte, N.C.
The outlook was somewhat brightened earlier in the day when new economic data showed consumer sentiment was at its highest level in more than five years, according to the Thomson Reuters/University of Michigan surveys, and wholesale inventories jumped in September, according to a Commerce Department report.
Shares of Walt Disney Co
The Dow Jones industrial average <.DJI> edged up 4.07 points, or 0.03 percent, to 12,815.39 at the close. The Standard & Poor's 500 Index <.SPX> rose 2.34 points, or 0.17 percent, to 1,379.85. The Nasdaq Composite Index <.IXIC> 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 2.6 percent.
The market's early gains on Friday came after stronger-than-expected figures on U.S. consumer sentiment.
But investors' enthusiasm cooled after hearing from the House speaker and the president about the fiscal cliff.
Boehner, a Republican, reiterated his opposition to any tax hikes on the wealthy late this morning. Obama responded in the early afternoon by saying there was no way around tax increases, but that he would remain open to any new ideas that congressional leaders might have.
The fiscal cliff is a combination of government spending cuts and tax increases set to go into effect early next year unless Congress acts to change the law before then. It could take an estimated $600 billion out of the U.S. economy and push it into recession.
"There was an anticipation that there may be more willingness to compromise, but just like Boehner did earlier in the day, both camps stuck to their lines in the sand, so to speak," said Mohannad Aama, managing director of Beam Capital Management LLC in New York.
Investors are reacting to the prospect of higher tax rates by selling both losing and winning stocks for the year to decrease the tax impact from their positions.
The euro zone is not inspiring confidence, either. Greece's finance minister said his country was running out of cash, growth in Germany is expected to weaken in the next two quarters, and France's central bank said the country's economy would slip into recession as 2012 ends.
Germany and France are the euro zone's two largest economies, and Greece has been scraping by, thanks to a 130-billion-euro bailout.
International Game Technology
Lions Gate Entertainment Corp
According to Thomson Reuters data through Friday, of the 449 companies in the S&P 500 that have reported earnings, 63.3 percent have topped analysts' expectations - slightly above the 62 percent average since 1994, but below the 67 percent beat rate over the past four quarters.
But revenue results remain disappointing, with only 38.2 percent of companies topping expectations - well below the 62 percent average since 2002, and the 55 percent beat rate over the past four quarters.
(Reporting by Atossa Araxia Abrahamian; Editing by Jan Paschal)
Most Popular Slideshows
- Prince William & Kate Middleton Caught Flirting In A Countryside Dinner Date [PHOTOS]
- Kate Middleton’s Mom Accused Of Being A Social Climber, Prince George Not Seen By Relatives
- Angelina Jolie & Brad Pitt’s Top Secret Wedding Tramps Jennifer Aniston’s ‘Friends’ Reunion & Pregnancy Talks [PHOTOS]
- 2014 US Open: Hottest Male Tennis Players To Watch [PHOTOS]
Join the Conversation
- Pricey iPhone 6 on Release Date Likely but with 3X Retina Resolution & Mobile Payment Service – Reports
- 5.5-Inch iPhone 6 is iPhone Air on Sept 19 Release Date: 5 Things to Consider Before Buying
- Google Nexus 8 Confirmed as HTC T1 aka Volantis/Flounder with Freshly-Leaked Specs & Features – Reports
- Nexus 6 Release Date Update: Moto X+1 Look Leaked, Nexus X or Shamu Moved to Demo Phase
- Europe, US Next on ISIS’ Hit List, Says Saudi King; Seized ISIS Laptop Reveals Terrifying Bio-Warfare Plans
- iPhone 6 On Release Date To Feature Qualcomm MDM9625M LTE, 1GB RAM, Mobile Payment Deal With AMEX, 1334x750 Display
- Leaker of Actresses Nude Photos Accepting PayPal Donations in Exchange For Posting Alleged Sex Video of Jennifer Lawrence, Has Naked Pictures of 100 Hollywood A-Listers