Wall St falls, hit by Reid's 'fiscal cliff' comments

NEW YORK Wed Nov 28, 2012 3:13am IST

A Wall Street sign is seen in front of the exterior of the New York Stock Exchange November 7, 2012. REUTERS/Chip East

A Wall Street sign is seen in front of the exterior of the New York Stock Exchange November 7, 2012.

Credit: Reuters/Chip East

Related Topics

Stocks

   
A statue of Ganesh, the deity of prosperity, is carried in a taxi to a place of worship on the first day of the ten-day-long Ganesh Chaturthi festival in Mumbai August 29, 2014. REUTERS/Danish Siddiqui

Ganesh Chaturthi Festival

During Ganesh Chaturthi idols will be taken through the streets in a procession accompanied by dancing and singing, and will be immersed in a river or the sea in accordance with Hindu faith.  Slideshow 

NEW YORK (Reuters) - U.S. stocks slid on Tuesday in a choppy session, losing ground in the last hour before the close after Senate Majority Leader Harry Reid expressed disappointment that there has been "little progress" in dealing with the "fiscal cliff."

The market was flat for most of the session but fell sharply after Reid's comments, a signal that investors remain skittish about the wrangling in Washington. The CBOE Volatility Index, or VIX, rose on Reid's words.

"It may be that the market feels the goodwill before (last week's) Thanksgiving is evolving into more political intransigence," said Quincy Krosby, market strategist at Prudential Financial in Newark.

"The clock is ticking on Wall Street, regarding a framework for (political) consensus," she said.

Markets are focused on 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.

As budget talks linger, Las Vegas Sands (LVS.N) and Supertex SUPX.O added their names to a growing list of companies announcing special dividends aimed at helping investors avoid a possibly higher tax burden next year.

Higher dividend and capital gains taxes are part of the negotiations in Washington and may rise even if a deal is crafted.

Las Vegas Sands jumped 5.3 percent to $46.36. Supertex rose 6.9 percent to $18.

The S&P 500's modest losses on Tuesday marked its worst day in eight sessions - indicating traders are unwilling to sell aggressively as a deal probably would trigger a rally. The benchmark S&P 500 once again closed below 1,400, a key psychological level that it had reclaimed last week as it rose nearly 4 percent.

The VIX .VIX shot up 2.7 percent to 15.92 at the close. Between 2 p.m. and 3 p.m. in New York, the VIX was up 3.9 percent.

The Dow Jones industrial average .DJI fell 89.24 points, or 0.69 percent, to 12,878.13 at the close. The S&P 500 .SPX dropped 7.35 points, or 0.52 percent, to finish at 1,398.94. The Nasdaq Composite .IXIC lost 8.99 points, or 0.30 percent, to end at 2,967.79.

Dealings in Washington obscured strong economic figures, including an increase in planned business spending and consumer confidence hitting its highest level in more than four years.

Strengthening the case for a sustained rebound in housing, single-family home prices rose for an eighth straight month in September. Shares of M/I Homes (MHO.N) gained 2.1 percent to $22.36. KB Home (KBH.N) added 1.1 percent to $14.61.

"As long as you have interest rates as low as they are right now, housing is definitely back," said Brian Amidei, managing director at HighTower Advisors in Palm Desert, California.

In another good sign for consumer demand, Corning Inc (GLW.N) shares rose 6.9 percent to $12.13 after the specialty glass maker said it expects full-year sales of its Gorilla glass, used in smartphones and tablets, to approach $1 billion.

Food maker Ralcorp Holdings RAH.N shares jumped 26.4 percent to $88.80 after long-time suitor ConAgra Foods (CAG.N) sealed a deal to buy it for $5 billion. ConAgra shares gained 4.7 percent to $29.63.

McMoRan Exploration Co MMR.N shares tumbled 15.2 percent to $8.18 a day after the oil and gas driller gave a disappointing update on a key gas prospect in a Gulf of Mexico well.

About 5.9 billion shares changed hands on the New York Stock Exchange, the Nasdaq and NYSE MKT, below the daily average so far this year of about 6.5 billion shares.

On the NYSE, roughly five issues fell for every four that rose. On Nasdaq, six stocks fell for every five that rose.

(Reporting by Rodrigo Campos; Additional reporting by Caroline Valetkevitch; Editing by Jan Paschal)

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

Market Eye

REUTERS SHOWCASE

Coal Block Allocation

Coal Block Allocation

Government urges Supreme Court to not cancel some 'illegal' coal mines  Full Article 

Modi in Japan

Modi in Japan

Japan and India agree to boost strategic ties at summit  Full Article 

HSBC PMI

HSBC PMI

Factory activity expands at slower clip in August.  Full Article 

Market Outlook

Market Outlook

Indian shares headed for correction, but outlook strong - BofA Merrill.  Full Article 

India Infrastructure

India Infrastructure

RBI rule handicaps India's infrastructure hopes  Full Article 

Book Talk

Book Talk

Reema Abbasi and a glimpse of Pakistan’s Hindu past  Full Article 

China Economy

China Economy

Retreat in China's PMIs heightens calls for policy easing.  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device.  Full Coverage