Stocks pull back on renewed 'fiscal cliff,' Europe fears
Wall Street came back to work after the Thanksgiving weekend and faced leftover worries about the “fiscal cliff” and the European debt crisis. Stocks retreated after one of their best weeks of the year.
The Dow Jones industrial average fell 42.31 points to 12,967.37. The Standard & Poor's 500 index declined 2.86 to 1,406.29. And the Nasdaq composite index managed a 9.93-point increase to 2,976.78.
The major economic reports were not due until later in the week, leaving investors to rehash the European debt crisis and talks in Washington over the “cliff” of tax increases and government spending cuts set to take effect Jan. 1.
“The themes seem about as recycled as Thanksgiving turkey,” David Kelly, chief global strategist at JPMorgan Funds, wrote in a note to clients.
He expected a better read on the economy later this week, with reports on consumer confidence on Tuesday and unemployment claims and third-quarter economic growth on Thursday.
Scott Carmack, co-portfolio manager at Leader Capital in Portland, Ore., said the decline Monday was all but inevitable after last week, when the Dow climbed 3.3 percent because of encouraging signs from Washington and good economic news overseas.
That made Monday a good day to cash out on last week's gains, Carmack said, especially because traders aren't sure how the fiscal cliff will affect the market for the rest of the year.
“Monday is a good day to take profits,” Carmack said. “No one was in on Friday, so they're doing it Monday.”
The National Retail Federation reported that 247 million shoppers visited stores and shopping websites during the long Thanksgiving weekend, up 9 percent from a year ago. They spent an average of $423, up 6 percent.
Some worry that the momentum won't last, and that deep discounting will hurt stores. Macy's fell $1.87, or 4.5 percent, to $39.86. Saks dropped 29 cents, or 2.8 percent, to $10.23. Target declined $1.71, or 2.6 percent ,to $62.77.
Abercrombie & Fitch was an exception, rising 21 cents to $44.61.
A government report released Monday warned that a sudden increase in taxes would crimp the spending of middle class families next year.
The report, by President Obama's National Economic Council and his Council of Economic Advisers, estimated that a married couple earning between $50,000 and $85,000 with two children would have a $2,200 increase in their taxes.
In Europe, leaders of European Union countries tried to reach a deal to lend more money to debt-crippled Greece. The ministers have failed twice in the last two weeks to reach an agreement to release (euro) 44 billion, or $56.8 billion.
In the United States, though, “Most of these uncertainties have been with us for quite some time,” Sam Stovall, chief equity strategist at S&P Capital IQ, wrote in a note Monday, “and are now regarded by many as annoyances to resolve rather than obstacles to fear.”
In the bond market, the yield on the 10-year U.S. Treasury note fell 2 percentage points to 1.66 percent from late Friday.
Show commenting policy
TribLive commenting policy
You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.
We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.
While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.
We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers.
We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.
We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.
We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.
We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.
- Bill Clinton to campaign next week for Tom Wolf in Pittsburgh
- Steelers use 3 late first-half TDs to stun Texans
- Rookie Bryant sparks deep passing game for Steelers in victory
- Seven in custody after New Kensington drug raid
- Cardinal Wuerl North Catholic High School has interim principal
- 12-year-old’s donated heart joins families, lets her memory live
- Chevron’s $20M to improve Pennsylvania workforce
- Steelers notebook: Adams replaces concussed Gilbert
- Rossi: Steelers’ season all about going big
- Bortuzzo could provide much-needed physical presence for Penguins
- Sheriff’s sale delayed for historic Conneaut Lake Park