4 Min Read
NEW YORK (Reuters) - U.S. stocks were little changed on Friday as investors were hesitant to make big bets ahead of a statement by President Obama on the progress of budget talks in Washington that have recently driven volatility in financial markets.
U.S. President Barack Obama, visiting a factory in Pennsylvania, will press his case on raising taxes on the wealthy to narrow the deficit. He is expected to make a statement around midday that is likely to impact markets.
"There is always hope in those situations that he (Obama) is going to announce some type of positive development," said Tim Ghriskey, chief investment officer of Solaris Group in Bedford Hills, New York. "We see how violently the market swings on positive and negative announcements."
Trading has been choppy as investors react to mixed statements from policymakers in Washington about discussions on averting the "fiscal cliff," spending cuts and tax hikes that will come into effect in the new year and could cause a recession, according to worst-case predictions.
Corporations continued to anticipate a harsher tax regime next year. Whole Foods Market Inc (WFM.O) was the latest to announce a special cash dividend of $2.00 per share to skirt higher dividend tax rates in 2013. The stock was up 0.6 percent at $93.60.
The Dow Jones industrial average gained 5.63 points, or 0.04 percent, to 13,027.45. The Standard & Poor's 500 Index dropped 0.58 points, or 0.04 percent, to 1,415.37. The Nasdaq Composite Index dropped 3.43 points, or 0.11 percent, to 3,008.59.
The S&P 500 was on track to end the month 0.3 percent higher, after declining nearly 2 percent in October. The index has recovered 4.5 percent since shedding 8 percent following the U.S. presidential election earlier in November.
"The correction from the S&P 500's September peak has allowed overbought momentum and optimistic sentiment conditions to recede, and we believe the index is closer to an intermediate-term buy signal than a sell signal," said Ari Wald, analyst at PrinceRidge Group.
Yum Brands Inc (YUM.N) shares slumped 9.4 percent to $67.42. The company said late Thursday it expects fourth-quarter sales at established restaurants to drop in China, where a cooling economy is making it difficult to exceed the 21-percent gain it enjoyed there a year earlier.
After a close relationship for several years, Facebook Inc (FB.O) and Zynga Inc (ZNGA.O) revised terms of a partnership agreement between the companies. Under the new pact, Zynga will have limited ability to promote its site on Facebook.
Zynga shares dropped 5.3 percent to $2.48. Facebook shares were down 1.2 percent at $26.99.
The markets' reaction to data on Friday was muted.
A report showed business activity in the U.S. Midwest expanded for the first time since August, buoyed by an improvement in the labor market.
Separately, data showed U.S. consumer spending fell in October for the first time in five months as income growth stalled, suggesting slower economic growth in the fourth quarter.
Apple Inc's (AAPL.O) latest iPhone has received final clearance from Chinese regulators, paving the way for a December debut in a highly competitive market where the lack of a new model had severely eroded its share of product sales. Shares of Apple were down 0.7 percent at $585.29.
Verisign Inc (VRSN.O) said the U.S. Department of Commerce had approved its agreement with ICANN to run the .com internet registry, but the company wouldn't be able to raise prices as before. The stock dropped 14.1 percent to $33.80 in late morning trading.
Editing by Bernadette Baum