Stocks Succumb to Late Selloff
In addition to tech, energy, and financials, other weak sectors included basic materials, conglomerates and capital goods. Only consumer non-cyclicals and utilities finished in the green.
Stocks got off to a weak start on Tuesday as uncertainties about the timeline of Greece's next tranche of bailout money and a deal on the U.S. fiscal cliff rattled investor confidence.
U.S. lawmakers now have seven weeks to hammer out a budget and avoid the fiscal cliff -- a set of automatic federal tax increases and spending cuts set to occur in January -- a situation that could lead the country back into a recession.Still "in the near term, the U.S. economy faces significant downside risks from the intensification of the fiscal restraint that is likely to occur even if policymakers resolve most of the 'fiscal cliff,'" warned Jan Hatzius, chief economist at Goldman Sachs. "Under our baseline estimate for the shape of a fiscal agreement -- which involves an end to the payroll tax cut, an end to the upper-income Bush tax cuts, and various smaller forms of restraint -- fiscal policy at the federal, state, and local level will subtract around 1-3/4 percentage points from real GDP growth in the first half of 2013, roughly 1 percentage point more than in 2012." Meanwhile, a meeting of eurozone finance ministers concluded without any concrete decisions on whether and when to unlock the next tranche of bailout money for Greece, though there was an agreement to give Greece two more years to fix its deficit. On the economic data front, the ICSC/Goldman Sachs retail index found same-store sales increasing 0.7% in the week ended Nov. 10. The advance was driven by restocking in the Northeast after Hurricane Sandy. Sales rose at a soft rate of 1.8% year over year. The Redbook's same-store sales index also showed an improvement in the week ended Nov. 10, rising by 1.6% from last year but the growth was considered tepid.
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