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Overnight Markets: Wall Street flat amid fiscal cliff concerns

Shares oscillated between gains and losses as investors awaited budget talks in the US and European finance heads met to discuss Greece.

 
Overnight Markets: Wall Street flat amid fiscal cliff concerns

U.S. stocks closed little changed on Monday as investors looked forward to budget talks in Washington and European finance chiefs met to discuss Greek aid.

The Dow Jones industrial average was flat at 12,815. The Standard & Poor's 500 Index closed little changed at 1,380. The Nasdaq Composite Index was off one point at 2,904.

Shares oscillated between gains and losses throughout the session as investors were concerned about the fiscal cliff - a series of budget cuts and tax hikes that will start to go into effect in the new year. Although there was hope that some deal will be reached, analysts fear going over the cliff could push the economy back into recession. There are also concerns that a protracted debate could hurt business and investment sentiment.

Volume was light as the U.S. bond market and government offices closed for the Veterans Day holiday. A glitch with one of the NYSE Euronext’s cash equity matching engines also affected the share trading.

In Europe, finance ministers met in Brussels yesterday. While the ministers will probably not approve €31.5 billion of financial aid to Greece, they will agree to prevent the country from defaulting on €5 billion of bills that mature on 16 November, a European official said.

Phone and health-care stocks rose the most, while utilities and technology companies had the biggest declines. United Technologies Corp. increased 1.5%, while AT&T Inc. advanced 1%.

Merger activity bolstered the price of specific stocks. Jefferies Group Inc. jumped 14 percent after Leucadia National Corp. (LUK) said it will buy the investment bank. Titanium Metals Corp. (TIE) surged 43 percent after Precision Castparts (PCP) Corp. agreed to buy the maker of titanium products.

In the biotech sector, Celgene Corp rose 5.8% after a late-stage clinical trial showed its drug Abraxane improved survival in patients with pancreatic cancer.

Homebuilders declined with D.R. Horton Inc. losing 5.8%. Atlanta-based Beazer Homes USA Inc. fell 17% after reporting a wider-than-estimated fourth-quarter loss.

In Asia, shares extended their losses on Tuesday led by banking shares and developers after Australia’s business confidence declined and on a report China may expand a property tax trial.

The MSCI Asia Pacific Index slipped 0.7% to 120 as of 12:01 p.m. in Tokyo. Japan’s Nikkei 225 Stock Average retreated 0.3% today, erasing an earlier gain of 0.5% as the yen strengthened.

Hong Kong’s Hang Seng Index fell 1% amid a sell-off in Chinese shares listed in the city. China’s Shanghai Composite Index was down 1.41%. South Korea’s Kospi slid 0.6%. Australia’s S&P/ASX 200 Index lost 1.1% after a private survey showed the country’s business confidence weakened.

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