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U.S. stocks drop as budgetary impasse drags on, Dow slides 0.27%
Published Dec 14, 2012 04:21PM ET
At the close of U.S. trading, the Dow Jones Industrial Average finished down 0.27%, the S&P 500 index was down 0.41%, while the Nasdaq Composite index slid 0.70%.
At the end of this year, the Bush-era tax breaks and other benefits expire at the same time deep cuts to public spending kick in, a combination known as a fiscal cliff that could push the U.S. economy into a recession next year if the nation's leadership fails to avoid it.
The White House has insisted fiscal reforms should include tax hikes on the top 2% of U.S. earners, something opposed by Republicans, who say they want to see more details from the Obama administration when it comes to cutting spending to narrow deficits and pay down debts.
Both sides made little progress on Friday, which gave investors reason to avoid U.S. stocks.
Elsewhere, the U.S. Bureau of Labor Statistics reported earlier that the country's consumer price index decreased by 0.3% in November from October, more than expectations for a 0.2% contraction and off from a 0.1% rise the previous month.
Year-on-year inflation rates came to 1.8%, below forecasts for a 1.9% reading.
The U.S. core consumer price index, which excludes more volatile food and energy costs, rose 0.1% last month, missing expectations for a 0.2% rise and off from a 0.2% increase in October.
Elsewhere, the Federal Reserve reported earlier that U.S. industrial production beat expectations in November, expanding 1.1% after a 0.7% decline in October.
Analysts had expected industrial production to rise 0.3% in November.
Meanwhile, the Markit research group reported that the U.S. manufacturing purchasing managers' index climbed to a preliminary 54.2 in December, its best performance since April, from 52.8 in November, beating market forecasts for a decline to 52.6.
Leading Dow Jones Industrial Average performers included Alcoa, up 1.75%, Hewlett-Packard, up 1.72%, and Caterpillar, up 0.70%.
The Dow Jones Industrial Average's worst performers included American Express, down 1.85%, Microsoft, down 1.07%, and Walt Disney, down 0.90%.
European indices, meanwhile, finished mixed.
After the close of European trade, the EURO STOXX 50 rose 0.11%, France's CAC 40 fell 0.06%, while Germany's DAX 30 finished up 0.19%. Meanwhile, in the U.K. the FTSE 100 fell 0.13%.
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