Wall Street lower on fiscal cliff gridlock, Yum! Brands in focus
Friday, 30 November 2012
U.S. equity markets were lower Friday afternoon as investors remain sidelined by political gridlock in Washington.
As at 2.45pm EDT, the Dow Jones Industrial Average was 0.13% lower at 13,004.39, the S&P 500 was down 0.15% at 1,413.85 and the NASDAQ was down 0.17% at 3,006.81.
Investors have been grappling with uncertainty as lawmakers and President Obama engage in brinksmanship over year-end tax hikes and spending cuts. The so-called fiscal cliff could harm the economy at a time when the outlook for growth is already in question.
House Speaker John Boehner on Friday said there is a stalemate between Republicans and the Obama administration over fiscal cliff talks after the White House made an opening offer for negotiations.
"There is a stalemate. Let's not kid ourselves," Boehner said in a press conference.
Boehner said Obama's proposal of $1.6 trillion in new tax revenue and less than $400 billion in spending cuts was not "serious."
In corporate news, Zynga (NASDAQ:ZNGA) shares extended their decline Friday, after tumbling on news that the terms of its deal with Facebook (NASDAQ:FB) had substantially changed.
Yum! Brands (NYSE:YUM) shares sank after the firm softened its expectations for China, predicting same-store sales in that key market would decline 4% in the fourth quarter.
Verisign (NASDAQ:VRSN), which makes money off .com Internet registrations, said it reached a new agreement with the Commerce Department that bars future price increases.
Genesco (NYSE:GCO) raised its full-year earnings forecast as the footwear and apparel retailer posted net profits of $40.9 million, or $1.70 a share, for the third quarter.
On the economic front, personal spending fell a seasonally adjusted 0.2% in October after surging 0.8% in prior month, the Commerce Department said. It was the first decline since May.
Chicago PMI faintly accelerated in November, rising to 50.4 from 49.9 in October. The index came in just a shade below the 50.5 MarketWatch-compiled economist consensus.
On the NYMEX, crude futures gained 54 cents, or 0.6%, to $88.61 a barrel while gold futures dropped $16.80, or 1%, to settle at $1,712.70 an ounce.
European markets finished higher with the DAX up 0.18%, the FTSE 100 gained 0.12% and the CAC 40 was up 0.12%.
Wall Street opened flat on Friday (November 30), amid caution ahead of a statement from U.S. President Barack Obama on the progress of budget talks in Washington that have fueled volatility and nervousness in the financial markets. Consumer spending fell in October for the first time in five months...