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U.S. stocks close lower as “fiscal cliff” looms

Souce:Xinhua Publish By Updated 28/12/2012 4:40 pm in Business / no comments


NEW YORK, Dec. 27 — U.S. stocks closed lower in choppy trading on Thursday as the deadline for the “fiscal cliff” neared.

The main indexes began drifting lower in the morning session after Senate Majority Leader Harry Reid said a deal before the ” fiscal cliff” deadline appeared unlikely because of a lack of progress in bipartisan negotiations. In late-session trading, however, Wall Street pared most of its earlier losses after GOP aides in the House of Representatives told media that House members would reconvene Sunday to resume talks.

The CBOE Volatility Index (VIX), a widely used gauge of fear in the market, once jumped above 20, not seen since July. Investors were growing more and more worried about the fiscal gridlock.

A lower consumer confidence index released by the Conference Board, an industry group, reflected fears among U.S. consumers for the upcoming “fiscal cliff.” The index tumbled to 65.1 in December, falling more than market expectation.

Upbeat jobs and housing data partly underpinned the market shortly after the opening bell. Initial claims for jobless benefits declined 12,000 to a seasonally adjusted 350,000 last week and the four-week moving average of claims, considered a more steady measure, fell to the lowest level since March 2008.

A separate report from the Commerce Department showed new home sales rose 4.4 percent in November to a seasonally adjusted 377, 000-unit annual rate.

Marvell Technology dropped 3.78 percent after it announced that it would seek to overturn a jury’s finding of patent infringement. A federal-court jury in Pittsburgh found the chipmaker infringed two patents held by Carnegie Mellon University and ordered the company to pay 1.17 billion U.S. dollars in damages.

The Dow Jones Industrial Average fell 18.28 points, or 0.14 percent, to 13,096.31. The broader S&P 500 Index dropped 1.74 points, or 0.12 percent, to 1,418.09. The tech-rich Nasdaq Composite Index dipped 4.25 points, or 0.14 percent, to 2,985.91.

Crude prices fell on fears of the looming “fiscal cliff” and the unexpected sharp decline in consumer confidence index in December.

Trading volume on Thursday continued to be extremely light, with turnovers of both Brent and U.S. crude sharply lower than their 30-day averages as many investors were still away for holidays.

Light, sweet crude for February delivery lost 11 cents, or 0.12 percent, to settle at 90.87 dollars a barrel on the New York Mercantile Exchange. Brent crude for February delivery slipped 27 cents, or 0.24 percent, to close at 110.80 dollars a barrel.

Meanwhile, the U.S. dollar rose against major currencies amid worries over the “fiscal cliff” which boosted safe-haven demand. The dollar continued rising against the yen as Japan’s newly elected Prime Minister Shinzo Abe, who resumed office Wednesday after his resignation in 2007, repeated his resolve to push for more monetary and fiscal easing measures and intervene yen’s exchange rate.

In late New York trading, the euro climbed to 1.3238 dollars from 1.3221 dollars of the previous session and the British pound fell to 1.6108 dollars from 1.6129.

The dollar slightly increased to 0.9137 Swiss francs from 0. 9133 and went up to 0.9948 Canadian dollars from 0.9944. The dollar bought 86.03 Japanese yen, higher than 85.63 in the previous session.



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