Wall Street flat as caution reigns supreme
By Edward Krudy | November 28, 2012 5:28 AM EST
Stocks barely budged on Tuesday as wrangling continued in Washington over key budget talks, counterbalancing progress in easing Greece's debt burden and a slew of positive U.S. economic data.
A deal in Europe to release emergency aid to debt-laden Greece gave a brief early lift to stocks, but the news was not enough to sustain the gains as investors confronted the looming "fiscal cliff" at home that could bring higher taxes and spending cuts.
As Democrats and Republicans prepared to resume efforts to bridge their sharp differences over taming the federal debt this week in Washington, the market resumed its cautious stance.
A number of companies, including Wal-Mart
Las Vegas Sands, which made the announcement late Monday, jumped 5.7 percent to $46.54. Heico climbed 3 percent to $41.56, while Supertex rose 2.8 percent to $17.31.
"It's about your money, and it's about right now," said Frank Lesh, a futures analyst and broker at FuturePath Trading LLC in Chicago. "At this point, you have to make your moves and avoid the threat of more taxes.
"Until there is deal, I would expect to see more of those machinations - just in case," he said.
The Dow Jones industrial average <.DJI> dropped 23.45 points, or 0.18 percent, to 12,943.92. The Standard & Poor's 500 Index <.SPX> inched up just 0.15 of a point, or 0.01 percent, to 1,406.44. The Nasdaq Composite Index <.IXIC> added 4.70 points, or 0.16 percent, to 2,981.48.
The market's worry is whether Congress and the White House can agree on ways to avoid some $600 billion in automatic spending cuts and tax increases that are due to kick in early next year. Some fear that dramatic fiscal restraint could push the U.S. economy into recession.
Market reaction was muted as data showed U.S. consumer confidence in November hit the highest level in more than four years and home prices in September rose for an eighth straight month.
In addition, a gauge of planned U.S. business spending increased by the most in five months in October, according to the Commerce Department's data on durable goods orders.
As of Monday's close, the S&P 500 was holding above 1,400, the level it reclaimed last week. But volume continued to be weak as traders waited for signs of any progress in negotiations to avoid the fiscal cliff. Last week, the S&P 500 gained nearly 4 percent.
Among individual stocks, Corning Inc
McMoRan Exploration Co
(Reporting by Edward Krudy; Additional reporting by Gabriel Debenedetti; Editing by Jan Paschal)