* Obama to meet with congressional Democrats, Republicans at
* Chicago PMI, pending home sales top expectations
* Indexes down: Dow 0.7 pct, S&P 0.7, Nasdaq 0.5 pct
(Updates to open, adds regional factory and housing data)
By Chuck Mikolajczak
NEW YORK, Dec 28 U.S. stocks fell on Friday,
putting the S&P 500 on track for a fifth straight decline, as
President Barack Obama and top congressional leaders were to
make a last-ditch attempt to steer the United States away from
driving off the "fiscal cliff."
Obama and lawmakers will meet at the White House Friday
afternoon for talks before a New Year's deadline to keep large
tax hikes and spending cuts from taking effect and threatening
the economy with recession.
Investors' pessimism about achieving anything more than a
stop-gap deal by the deadline showed in the benchmark S&P
index's 1.6 percent decline this week. The broad index was on
pace for its worst weekly performance since the U.S. elections.
With time running short, members of Congress may attempt to
pass a retroactive fix on tax rises and spending cuts soon after
the automatic fiscal policies come into effect on Jan. 1.
"It doesn't matter which side wins, but at this point nobody
wants to play a game where there aren't rules," said Joe
Costigan, director of equity research at Bryn Mawr Trust in Bryn
"So everybody is talking about what the prospects are for
changes in the rules, but at the end of the day nothing is
Highlighting Wall Street's sensitivity to developments in
Washington, stocks took a dive of more than 1 percent on
Thursday after Senate Majority Leader Harry Reid warned a deal
was unlikely before the deadline. But later the index rebounded
after the House of Representatives said it hold an unusual
Sunday session to work on a fiscal solution.
With many market partcipants away for the holiday-shortened
week, volume is expected to remain light, which could exacerbate
The Dow Jones industrial average dropped 90.70
points, or 0.69 percent, to 13,005.61. The Standard & Poor's 500
Index lost 9.74 points, or 0.69 percent, to 1,408.36. The
Nasdaq Composite Index fell 16.25 points, or 0.54
percent, to 2,969.66.
Market breadth was skewed to the negative, with declining
stocks outnumbering gainers on the NYSE by 2,044 to 690, while
on the Nasdaq, decliners outnumbered advancers 1,466 to 707.
Positive economic data failed to alter the market's
The National Association of Realtors said contracts to buy
previously owned U.S. homes rose in November to their highest
level in 2-1/2 years, while a report from the Institute for
Supply Management-Chicago showed business activity in the U.S.
Midwest expanded in December.
Barnes & Noble Inc rose 8.2 percent to $15.55 after
the company said Pearson had agreed to make a
strategic investment in its Nook Media subsidiary, but the Nook
business will also not meet the bookseller's prior projection
for fiscal year 2013.
MagicJack Vocaltec Ltd forecast over $39 million in
GAAP revenue and over 70 cents per share in operating income for
the fourth quarter and appointed Gerald Vento president and CEO,
effective January 1. Shares jumped 6.9 percent to $17.40.
Aeterna Zentaris Inc U.S.-listed shares
surged 18.4 percent to $2.57 after the company said it had
reached an agreement with the U.S. Food and Drug Administration
on a special protocol assessment by the FDA for phase 3
registration trial in endometrial cancer with AEZS-108
(Reporting by Chuck Mikolajczak; Editing by Kenneth Barry)