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Overnight Markets: U.S. stocks extend losses on fiscal worries

Worries about Washington's ability to find a timely solution to the "fiscal cliff" weighed on Wall Street.

 
Overnight Markets: U.S. stocks extend losses on fiscal worries

U.S. stocks declined for a second day on Thursday, as the Standard & Poor’s 500 Index had the biggest two-day decline in a year, as investors speculated Greece’s bailout will be delayed and amid worries about Washington's ability to find a timely solution to the "fiscal cliff".

The Dow Jones industrial average lost 121 points, or 0.94%, to end at 12,811. The Standard & Poor's 500 Index fell 17 points, or 1.22%, to 1,378, ending at its lowest level since 2 August. The Nasdaq Composite Index dropped 42 points, or 1.42%, to close at 2,896.

Shares were supported early in the trading day after the U.S. government reported a better-than-expected drop in weekly first-time claims for unemployment benefits as well as a rise in U.S. exports.

But it was soon overshadowed by the concerns that if no deal is reached in Congress over nearly $600 billion in spending cuts and tax increases due to take effect early next year, the struggling U.S. economy could fall into recession.

In Europe, finance ministers may delay a decision to unlock funds for Greece until late November as they await a full report on the country’s compliance with the terms of its bailout, a European Union official said.

McDonald's Corp shares lost 2% after the world's largest hamburger chain reported its first monthly drop in global sales since March 2003. Apple plunged for a second day, with the stock falling 3.6%.

Prudential slumped 4.8% after the Newark, New Jersey-based company cut its projection of annual stock market returns, including dividends, to 8% from 9.25%.

On the positive side, Qualcomm Inc surged 4.4% after the leading supplier of chips for cell phones reported quarterly revenue on Wednesday that beat expectations.

Among other earnings reports, Whole Foods Market Inc slid 5.9% after the company posted earnings that met expectations, but said Hurricane Sandy was a drag on sales this quarter.

After the bell, Groupon lost 16.1% after reporting results that missed expectations.

Shares of Priceline.com fell 1.6% after news that the online travel agency bought smaller rival Kayak Software. Kayak shot up 27.8% in extended trading.

In Asia, shares fell on Friday in morning trade amid concern Greece’s bailout may be delayed and as Australia’s central bank slashed its growth forecast.

The MSCI Asia Pacific Index fell 0.7% to 121 as of 10:14 a.m. in Tokyo. Australia’s S&P/ASX 200 Index declined 0.6% as its central bank reduced its 2013 economic growth forecast. South Korea’s Kospi Index dropped 1.5% as the nation’s central bank kept its key interest rate unchanged today. Japan’s Nikkei 225 Stock Average fell 1.2%. New Zealand’s NZX 50 Index fell 0.2%. In Hong Kong, Hang Seng Index was down 0.47%, while China’s Shanghai Composite Index fell 0.07%.

3 comments so far. Why not have your say?

Geoff Downs

Nov 09, 2012 at 09:54

Everyone knows they will kick the can down the road. Maybe stocks are falling because the WORLD economy is in a mess. Then we always have Ben.

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joe stalin

Nov 09, 2012 at 12:08

Bloomberg presenters are hyperventilating and I have lost count how many time the cliff has been mentioned already. It will be a non event as a compromise wil be found as it always is Uh I wonder what crisis we will lurch to next. Time to hit the shops and stock up on water candles and baked beans. sadly this nonsense looks like it will continue into next week when we have options expiration Oh joy. Is it any wonder algorithem traders are having any bad time you just can't model hysteria and irrationality it would seem.

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Geoff Downs

Nov 09, 2012 at 12:19

The problem is not whether fiscal cliff will be avoided in January, it will. It is the longer term problem of debt, eventually that will cause a problem, just a question of when.

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