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Overnight Markets: Stocks fall amid sluggish budget negotiations
Concerns about progress in dealing with the "fiscal cliff" overshadowed strong economic data and a European agreement on Greece aid.
U.S. stocks slid on Tuesday as concerns about progress in dealing with the "fiscal cliff" overshadowed a better-than-forecast report on durable goods and a European agreement on Greece aid.
The Dow Jones industrial average fell 89 points, or 0.69%, to 12,878 at the close. The S&P 500 dropped seven points, or 0.52%, to finish at 1,399. The Nasdaq Composite lost nine points, or 0.30%, to end at 2,968.
Shares lost 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.
Budget negotiations in Washington overshadowed strong economic figures, including an increase in planned business spending and consumer confidence hitting its highest level in more than four years. Separately, demand for U.S. goods such as machinery and electronics climbed in October by the most in five months.
In Europe, finance ministers authorised Greece to receive a €34.4 billion loan installment in December. They also slashed the rates on loans made under the first bailout of Greece in May 2010 and suspended interest payments for a decade on lending agreed under the country’s second bailout.
Hewlett-Packard Co. lost 3% after Autonomy Corp.’s former chief executive officer challenged the computer maker’s board to explain allegations that the software company falsified financial statements.
Western Digital Corp., which makes disk drives and network products, also fell, losing 3.1%.
However, Las Vegas Sands jumped 5.3% and Supertex rose 6.9% after the company announced special dividends aimed at helping investors avoid a possibly higher tax burden next year.
Shares of M/I Homes gained 2.1% and KB Home added 1.1% after single-family home prices rose for an eighth straight month in September.
Corning Inc shares rose 6.9% after the specialty glass maker said it expects full-year sales of its Gorilla glass, used in smartphones and tablets, to approach $1 billion.
In deal news, food maker Ralcorp Holdings shares jumped 26.4% after long-time suitor ConAgra Foods sealed a deal to buy it for $5 billion. ConAgra shares gained 4.7%.
In Asia, shares declined on Wednesday after as the Organisation for Economic Cooperation and Development said failure to prevent the fiscal cliff in the U.S. would increase the risk of a global recession.The MSCI Asia Pacific Index slid 0.5% to 123 as of 1:05p.m. in Tokyo. Japan’s Nikkei 225 Stock Average fell 0.8% and South Korea’s Kospi Index lost 0.9%. Australia’s S&P/ASX 200 Index slid 0.3%, the Shanghai Composite Index dropped 0.7% and Hong Kong’s Hang Seng slipped 0.8%. Singapore’s Straits Times Index and Taiwan’s Taiex Index both declined 0.3%.
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