Apple leads falls as fiscal cliff looms
US stocks slid on Friday amid worries about Washington’s budget impasse, with a sharp drop in Apple weighing on the Nasdaq.
The Dow Jones Industrial Average slipped 35.71 points, or 0.3 per cent, to 13,135.01 at the close. The Standard & Poor's 500 Index fell 5.87 points, or 0.4 per cent, to 1413.58. The Nasdaq Composite Index lost 20.83 points, or 0.7 per cent, to close at 2971.33.
In offshore trading late Friday:
- SPI futures fell 10 points to 4571
- The dollar inched up to $US1.0566
- Spot gold was flat at $US1696
- Brent oil rises to $US109.15 a barrel
For the week, the Dow slipped 0.2 per cent, while the S&P 500 fell 0.3 per cent and the Nasdaq declined 0.2 per cent.
The possibility of a "fiscal cliff" deal not taking place until early 2013 is rising. The back-and-forth negotiations over the fiscal cliff in Washington have kept markets on hold in what would already be a quiet period for stocks.
"We're faced with uncertainty ... and that's going to continue now into January. It basically puts everybody on hold and (you) just have the markets kind of thrash around," said Larry Peruzzi, senior equity trader at Cabrera Capital Markets Inc in Boston.
President Barack Obama and US House of Representatives Speaker John Boehner held a "frank" meeting on Thursday at the White House to discuss how to avoid the tax hikes and spending cuts set to kick in early in 2013.
Apple's stock slid 3.8 per cent to $US509.79 after UBS cut its price target on the stock to $uS700 from $US780. The stock of the most valuable U.S. company has been hit hard in the last three months. On Friday, Apple's stock fell after a tepid reception for the iPhone 5 in China.
The S&P Information Technology Index lost 1 per cent as Apple fell and Jabil Circuit shed 5.5 per cent to $US17.51 after UBS cut its price target.
Among other Nasdaq decliners, shares of chipmaker Qualcomm slid 4.7 per cent to $US59.83. A semiconductor index dropped 0.7 per cent.
American Express Co shares fell 1.9 per cent to $US56.65 and ranked as the heaviest weight on the Dow.
Investors are concerned that going over the cliff could tip the economy back into recession. While a deal is expected to ultimately be reached, a drawn-out debate - like the one over 2011's debt ceiling - can erode confidence.
Best Buy Co Inc slid 14.7 per cent to $US12.05 after the electronics retailer agreed to extend the deadline for the company's founder to make a bid. Shares jumped as much as 19 per cent on Thursday after initial reports of a bid this week from founder Richard Schulze.
Among the day's economic data, consumer prices fell in November for the first time in six months, indicating U.S. inflation pressures were muted. A separate report showed manufacturing grew at its swiftest pace in eight months in December.
Data out of China was encouraging, as Chinese manufacturing grew at its fastest pace in 14 months in December. The news was deemed as helpful for US materials companies, including US Steel, which rose 6.8 per cent to $US23.85. An S&P material sector index rose 0.9 per cent.
Volume was roughly 5.8 billion shares traded on the New York Stock Exchange, the Nasdaq and the NYSE MKT, compared with the year-to-date average daily closing volume of 6.52 billion.
Decliners outnumbered advancers on the NYSE by a ratio of about 8 to 7. On the Nasdaq, decliners barely held an edge over advancers, with 1,241 stocks falling and 1,196 shares rising.