Dec. 28 - Summary of business headlines: Stocks slide for fifth day over 'fiscal cliff' stalemate; Existing home sales rise to highest in 2 1/2 years; Port strike averted for 30 days; Apple won't sue over Galaxy S III. Carmen Roberts reports.
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Washington talks and investors walk. Stocks put in their longest losing streak in three months as a solution to the fiscal cliff continues to elude Congress and the President. With a Monday deadline looming trading was volatile on rumors the President would offer a new budget plan.
That turned out not to be the case and the major benchmark indexes slid in late day trading, capping their fifth straight day of losses. The Dow and the Nasdaq both lost ground during the holiday-shortened week.
BNP Paribas Economist, Bricklin Dwyer, says the markets have factored in a deal, even it's only a stop-gap measure.
SOUNDBITE: BRICKLIN DWYER, ECONOMIST, BNP PARIBAS (ENGLISH) SAYING:
"If a deal does not get done, that means that equity prices are going to take a big hit. Consumer confidence is going to take an even bigger hit at the beginning of the year and that means that consumers are going to be pulling back on some of their spending that they had been expected to do in the first quarter of the year."
Positive economic data failed to rally investors. Separate reports show sales of existing homes rose in November to their highest in two and a half years. And business activity in the Midwest expanded in December.
Right now, it's all about 'fiscal cliff' gridlock. But as Eric Green at Penn Capital Management tells Reuters, "The market does not feel this will go on forever. It's pretty optimistic something will happen next week."
One thing that won't happen next week is a strike that would have shut down 15 eastern U.S. ports and caused havoc in the economy. The two sides agreed Friday to extend the contract for 30 days, after solving the contentious issue of royalty payments for shipping containers.
And Apple agrees to drop patent claims against a new Samsung phone, now that the Korean company says it will not offer the Galaxy S III in the U.S. market. Earlier this year, Apple won a $1 billion dollar verdict against other Samsung phones.
In Europe, concerns over the fiscal cliff pushed shares lower in their last full trading session of 2012.