The market, worried again, retreats

  • Article by: CHRISTINA REXRODE , A ssociated Press
  • Updated: November 26, 2012 - 5:54 PM

Concerns about the U.S. fiscal cliff and European debt resurfaced after stocks had one of their best weeks of year.

NEW YORK -- Wall Street came back to work after the Thanksgiving weekend and faced leftover worries about the "fiscal cliff" and the European debt crisis. Stocks retreated after one of their best weeks of the year.

The Dow Jones industrial average fell 42.31 points to 12,967.37. The Standard & Poor's 500 index declined 2.86 to 1,406.29. And the Nasdaq composite index managed a 9.93-point increase to 2,976.78.

Utility stocks rose the most, while telecommunications companies fell the most.

The major U.S. economic reports were not due until later in the week, leaving investors to rehash the European debt crisis and talks in Washington over the "cliff" of tax increases and government spending cuts set to take effect Jan. 1.

"The themes seem about as recycled as Thanksgiving turkey," David Kelly, chief global strategist at JPMorgan Funds, wrote in a note to clients.

He expected a better read on the economy later this week, with reports on consumer confidence on Tuesday and unemployment claims and third-quarter economic growth on Thursday.

Scott Carmack, co-portfolio manager at Leader Capital in Portland, Ore., said the decline Monday was all but inevitable after last week, when the Dow climbed 3.3 percent because of encouraging signs from Washington and good economic news overseas.

That made Monday a good day to cash out on last week's gains, Carmack said, especially because traders aren't sure how the fiscal cliff will affect the market for the rest of the year.

"Monday is a good day to take profits," Carmack said. "No one was in on Friday, so they're doing it Monday."

The National Retail Federation reported that 247 million shoppers visited stores and shopping websites during the long Thanksgiving weekend, up 9 percent from a year ago. They spent an average of $423, up 6 percent.

Some worry that the momentum won't last, and that deep discounting will hurt stores. Macy's fell $1.87, or 4.5 percent, to $39.86. Saks dropped 29 cents, or 2.8 percent, to $10.23. Target declined $1.71, or 2.6 percent ,to $62.77.

Abercrombie & Fitch was an exception, rising 21 cents to $44.61.

The cliff cast a pall. A government report released Monday warned that a sudden increase in taxes would crimp the spending of middle class families next year, and some analysts wondered whether families would curb spending before the year is over.

The report, by President Obama's National Economic Council and his Council of Economic Advisers, estimated that a married couple earning between $50,000 and $85,000 with two children would see a $2,200 increase in their taxes.

In Europe, leaders of European Union countries tried to reach a deal to lend more money to debt-crippled Greece. The ministers have failed twice in the last two weeks to reach an agreement to release (euro) 44 billion, or $56.8 billion.

  • get related content delivered to your inbox

  • manage my email subscriptions

ADVERTISEMENT

Connect with twitterConnect with facebookConnect with Google+Connect with PinterestConnect with PinterestConnect with RssfeedConnect with email newsletters

ADVERTISEMENT

Advertisement
Golden Gavel by Star Tribune

Countdown to great deals

Bid Sept. 21-29

ADVERTISEMENT

ADVERTISEMENT

ADVERTISEMENT

ADVERTISEMENT

ADVERTISEMENT

 
Close