Wall Street trims gains, volatile after Boehner remarks
By Edward Krudy | November 30, 2012 4:42 AM EST
Stocks climbed on Thursday, but shed some earlier gains, after John Boehner, the top Republican in Congress, poured cold water on hopes that lawmakers were getting closer to cutting a budget deal that would avert a possible recession next year.
Boehner's comment - that no "substantive" progress had been made in fiscal talks with the White House - was the latest in a string of contrary pronouncements by policymakers that have wobbled the markets as investors attempt to speculate over whether Washington will finally cut a deal.
There have been some signs that leaders are moving closer to a fiscal agreement. The S&P 500 has gained nearly 5 percent after dropping almost 8 percent following the U.S. election in November. But investors remain wary that ad hoc statements from politicians can spark quick reversals in the market.
"When the sentiment is that nothing is going to get done, it does create a lot of anxiety and selling pressure. If there's any sense of progress, then the market seems to rally," said Eric Kuby, chief investment officer at North Star Investment Management in Chicago. "I think we're hostage to this for the rest of the year."
Discussions are ongoing in Congress over avoiding big spending cuts and tax hikes, known as the "fiscal cliff," that will begin to take effect from January.
The Dow Jones industrial average <.DJI> gained 6.95 points, or 0.05 percent, to 12,992.06. The Standard & Poor's 500 Index <.SPX> gained 3.40 points, or 0.24 percent, to 1,413.33. The Nasdaq Composite Index <.IXIC> gained 11.82 points, or 0.40 percent, to 3,003.60.
U.S.-listed shares of BlackBerry maker Research In Motion
Shares of top retailers retreated in the wake of data showing a weak start to November sales after superstorm Sandy. Target
The U.S. economy grew faster than initially thought in the third quarter as businesses restocked, but consumer and business spending were revised lower in a sobering reminder of the economic recovery's underlying weakness.
Gross domestic product expanded at a 2.7 percent annual rate in the quarter, the Commerce Department said, as export growth helped offset the weakest consumer spending and first drop in business investment in more than a year.
Contracts to buy previously owned U.S. homes rose more than expected in October, a sign the housing market recovery advanced into the fourth quarter despite a mammoth storm and concerns over looming tax hikes.
Shares of companies that build homes rose. The PHLX housing index <.HGX> rose 0.4 percent, shedding some earlier gains in line with the pullback in the broader market.
Although domestic events largely dominated investors' attention, the euro zone is still on the radar. The yield on Italy's 10-year bonds fell to the lowest in two years at an auction, amid relief that international lenders reached agreement this week to reduce Greece's debt by more than 40 billion euros.
"The fact that the bond sales in Europe went well suggest confidence is beginning to reenter some of the peripheral nations and that is a good sign," said Peter Cardillo, chief market economist at Rockwell Global Capital in New York.
(Additional reporting by Caroline Valetkevitch; Editing by Bernadette Baum)
Join the Conversation
- More Bad News for Android 5.0 Lollipop As Problems Come In for Nexus and Other Devices
- US To Supply Defensive Lethal Weapons To Kiev – A Vey Alarming Signal, Says Russia
- Amazon Black Friday 2014 Deals Start On Nov. 21, 2014 Including Limited-Time Lightning Deals And Deals Of The Day On Clothes, Toys, Jewelry, Watches, Bags, Accessories And Electronics
- Travel Alert: New Delta Air Lines Airbuses Could Be Seen In Australia Soon
- Walmart Canada Feeling The Heat As Grocery War Intensifies
- Travel Alert: Frequent Flyer Tie-Up Between Virgin Australia, South African Airways Enhanced
- Product Recall: Graco Recalls Baby Strollers in Canada, U.S. Due To Amputation Risks