Wall Street set to open flat on "fiscal cliff" uncertainty
By Leah Schnurr | December 11, 2012 1:21 AM EST
Stocks were set to open little changed on Monday as investors awaited any sign of progress in talks to avert the United States' so-called fiscal cliff of tax hikes and spending cuts.
Developments in Europe weighed after Italian Prime Minister Mario Monti said he would resign once the 2013 budget is approved. The move added to uncertainty about handling the euro zone debt crisis and drove Italy's borrowing costs higher.
U.S. President Barack Obama met with Republican House Speaker John Boehner on Sunday to negotiate a deal for avoiding the "fiscal cliff" that is set to go into effect in the new year.
The two sides declined to provide details about the unannounced meeting.
The "fiscal cliff" talks have kept markets on edge in the last month as investors worry the scheduled measures could send the economy into recession if politicians do not reach a deal.
"It is taking its toll on consumers, no question about that, but at the very end there will be a deal," said Peter Cardillo, chief market economist at Rockwell Global Capital in New York.
Shares of McDonald's Corp
Cardillo said he expected a choppy trading day that could end near Friday's close as investors start to turn their attention to the Federal Reserve's policy-setting meeting on Tuesday and Wednesday.
The Fed is expected to announce a new round of Treasury securities purchases at the end of the meeting, according to a Reuters poll. The bond buying would replace the "Operation Twist" stimulus, which expires at the end of December.
S&P 500 futures fell 0.5 point and were below fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures rose 2 points, and Nasdaq 100 futures slipped 3.5 points.
U.S.-listed shares of energy company Nexen Inc
Honeywell also forecast 2013 profit below estimates, partly hurt by a charge related to the acquisition.
China's export growth slowed sharply in November, highlighting the global headwinds dragging on the world's second-largest economy. But other data over the weekend showed both industrial output and retail sales rose in November at their fastest annual pace in eight months, suggesting China's economy is picking up.
(Editing by Kenneth Barry)
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