Wall Street succumbs to Apple's fall, "cliff" uncertainty

NEW YORK Fri Dec 14, 2012 6:02pm EST

1 of 5. Traders work on the floor of the New York Stock Exchange, December 14, 2012.

Credit: Reuters/Brendan McDermid

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NEW YORK (Reuters) - Stocks fell on Friday as another slide in Apple took a toll and investors unloaded some shares because of the uncertainty surrounding the "fiscal cliff" negotiations.

For the Nasdaq, this marked the second losing week in a row. All three major U.S. stock indexes ended the week slightly lower.

Apple's (AAPL.O) stock slid 3.8 percent to $509.79 after UBS cut its price target on the stock to $700 from $780. 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 .GSPT lost 1 percent as Apple fell and Jabil Circuit Inc (JBL.N) shed 5.5 percent to $17.51 after UBS cut its price target.

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 U.S. 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.

The Dow Jones industrial average .DJI slipped 35.71 points, or 0.27 percent, to 13,135.01 at the close. The Standard & Poor's 500 Index .SPX fell 5.87 points, or 0.41 percent, to 1,413.58. The Nasdaq Composite Index .IXIC lost 20.83 points, or 0.70 percent, to close at 2,971.33.

For the week, the Dow slipped 0.2 percent, while the S&P 500 fell 0.3 percent and the Nasdaq declined 0.2 percent.

Among other Nasdaq decliners, shares of chipmaker Qualcomm (QCOM.O) slid 4.7 percent to $59.83. A semiconductor index .SOX dropped 0.7 percent.

American Express Co (AXP.N) shares fell 1.9 percent to $56.65 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 (BBY.N) slid 14.7 percent to $12.05 after the electronics retailer agreed to extend the deadline for the company's founder to make a bid. Shares jumped as much as 19 percent 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 U.S. materials companies, including U.S. Steel (X.N), which rose 6.8 percent to $23.85. An S&P material sector index .GSPM rose 0.9 percent.

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.

(Reporting by Caroline Valetkevitch; Editing by Jan Paschal)

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Comments (5)
AZreb wrote:
Will someone explain why Wall Street and the stock market are our barometers of US economy when so many of the big corporations on the board have outsourced labor and built factories in other countries – plus pay little to no taxes to the US? This is not helping our own workers and our own country.

Dec 14, 2012 8:10am EST  --  Report as abuse
jabberwolf wrote:
AZreb because big companies are a representation of investment IN THE USA. Retards like Obama and those that kiss his butt seem to not realize that. That WallStreet IS AMERICA. Its where we all invest and where our bosses ask for investment. Trickledown is a real thing and when Wallstreet is doing badly – is a bad barometer for the rest of the USA.

Dec 14, 2012 1:42pm EST  --  Report as abuse
MJGSimple wrote:
jabberwolf – You must work for a publicly traded company. You might be surprised to know the number of publicly traded companies is dwindling and they already represent an amazingly small percentage of U.S. businesses. Less than 0.01% of American businesses are represented in the stock market.

AZreb – The stock market is considered a barometer for the US economy because that is were we put our money. If you’re saving in a 401k or Roth IRA, you are putting your future in the hands of the stock market. Also, as you save money in the bank, the bank usually invests that money either as loans to other people or in the stock market. Since that is where most of the money goes, that is where we measure how our money is doing. You’re right, however, that most corporations are less interested in development and returns for Americans as a whole than in their own pockets. So they take our money, move our jobs, and then pocket the returns as “acquisitions” rather than paying dividends and/or taxes.

Lastly, many don’t seem to understand that an increasing number of people in the US are living check to check. They don’t have investments. Thus, we are systematically making them poorer.

Dec 14, 2012 3:38pm EST  --  Report as abuse
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