U.S. stocks fell sharply on Friday after Republican Congressional leaders late Thursday canceled a vote on extending Bush-era tax cuts for everyone making less than $1 million a year, casting new doubts for prospects for a comprehensive budget bill. The stalling progress on tax and spending issues overshadowed mostly positive economic data.
Data Front
In economic news, the Thomson Reuters/University of Michigan's final December consumer sentiment survey came in slightly shy of expectations with a 72.9 reading, down from 74.5 last month. Analysts were looking for 74.7 reading.
Durable goods orders rose a modest 0.7% last month, largely in line with expectations. Analysts said aircraft orders were the main negative last month, with core capital goods orders - non-defense items and also excluding aircraft, often seen as a measure of business investment - climbing a healthy 2.7%.
October capital goods orders also were revised higher to 3.2% from 1.7%, turning the 3-month annualized rate positive again. Overall, the data suggest that capital spending could be stabilizing, although spending remains softer than earlier on in the recovery, according to a CIBC analysis.
Also, the Commerce Department reported personal spending rose 0.4% in November. in line with expectations.
Commodities ended mixed. Crude-oil prices fell $1.47, or 1.6%, to settle at $88.66 a barrel on the New York Mercantile Exchange. Oil on a weekly basis finished higher, by 2.2%. Gold climbed, adding 0.9% to settle at $1,660.10 an ounce, boosted by renewed safe-haven demand after the House cancelled the vote.
Here's Where U.S. Stocks Stood At Day's End
- NYSE Composite Index down
- Dow Jones Industrial Average down
- S&P 500 down
- Nasdaq Composite Index down
- Nikkei 225 Index down 0.99%
- Hang Seng Index down 0.68%
- Shanghai China Composite Index down 0.69%
- FTSE 100 Index down 0.31%
- (+) HALO, Enters worldwide collaboration and license agreement with Pfizer (PZE) to develop products combining PZE biologics with HALO's Enhanze technology.
- (+) ASCA, Agrees to be acquired by Pinnacle Entertainment (PNK) for $26.50 per share. PNK shares also rallied.
- (+) FCFC, Private-equity firm offers $10 a share to acquire the specialty financial services company.
- (-) MU, Reports $0.27 a share Q1 net loss, $0.07 wider than analyst were expecting. Revenues also were below consensus, with the chip-maker citing slowing personal computer sales and broader economic uncertainty.
- (-) MHH, Announced an ex-dividend date of December 24 and a cash dividend payment of $2 per share scheduled for Friday, Dec 21.
- (-) GDI, Ends Talks with SPX (SPW). Earlier in the month, reports surfaced that SPW was the front-runner to acquire GDI.