US stocks slip as fiscal cliff talks drag on

US stocks slip as fiscal cliff talks drag on

The S&P 500 ended its six-day winning streak, retreating as worries intensified that Washington's fiscal cliff negotiations were dragging on with little progress.

Anxiety about the drawn-out talks between Democrats and Republicans was enough to offset encouraging data on retail sales and jobless claims.

There is concern that tax hikes and spending cuts, set to begin in 2013 if a deal is not reached in Washington, will hurt growth. The stock market has taken the heated rhetoric in stride of late, but downbeat remarks from Republican House Speaker John Boehner prompted some selling.

Mr Boehner accused President Barack Obama of "slow walking" the economy off the fiscal cliff. He is scheduled to meet with Obama later on Thursday.

"There is no conviction here and Boehner's comments - as harsh as they were - were realistic," said Jason Weisberg, managing director at Seaport Securities, in New York.

"The fiscal cliff is already built in. That being said, people don't like to be told the apocalypse is coming over and over and over again. The real players in this market have already closed their books." After coming close to a 1 per cent decline for the day, the S&P 500 pared losses late in the session. The index had posted six straight sessions of gains through Wednesday's close, and at one point on Wednesday, the S&P touched its highest intraday level since October 22.


While the Federal Reserve's announcement on Wednesday of a new round of economic stimulus bolstered stocks, Chairman Ben Bernanke's comments that monetary policy would not be sufficient to offset the impact of the fiscal cliff weighed on sentiment.

Apple's stock, down 1.7 per cent at $529.69, was among the biggest drags on the Nasdaq in Thursday's session, while International Business Machines, down 0.5 per cent at $191.99, was among the biggest weights on the Dow. A US jury found that Apple's iPhone infringed three patents owned by MobileMedia Ideas.

Among the day's biggest gainers, Best Buy shares shot up 15.9 per cent to $14.12 after a report that the company's founder is expected to offer to buy the consumer electronics retailer by the end of the week.

The Dow Jones industrial average tumbled 74.73 points, or 0.56 per cent, to 13,170.72 at the close. The Standard & Poor's 500 Index fell 9.03 points, or 0.63 per cent, to 1419.45. The Nasdaq Composite Index slid 21.65 points, or 0.72 per cent, to end at 2992.16.

Energy and information technology sectors were the S&P 500's weakest performers, with the S&P energy index down 0.9 per cent.

In the energy sector, shares of Nabors Industries dropped 4.7 per cent to $13.85 after Jefferies cut the drilling company's rating. Shares of US refining company Phillips 66 lost 1.6 per cent to $52.21.

The day's economic data sent some positive signals on the economy, with weekly claims for jobless benefits dropping to nearly the lowest level since February 2008, and retail sales rising in November after an October decline, improving the picture for consumer spending.

In Europe, European Union finance ministers reached agreement to make the European Central Bank the bloc's top banking supervisor, which could boost confidence in EU leaders' ability to confront the euro zone's sovereign debt crisis.


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