US stocks slide on cliff, Apple worries

Published Dec 15, 2012 09:40am

Traders work on the floor of the New York Stock Exchange while a screen shows U.S. Federal Reserve Chairman Ben Bernanke's news conference, Dec 12, 2012. Stocks ended little changed on Wednesday, giving up most of the day's gains after Bernanke reiterated that monetary policy won't be enough to offset damage from the “fiscal cliff.” - Reuters
Traders work on the floor of the New York Stock Exchange while a screen shows U.S. Federal Reserve Chairman Ben Bernanke's news conference, Dec 12, 2012. - Reuters

NEW YORK: US stocks fell Friday amid worries about Washington's budget impasse over the looming fiscal cliff, with a sharp drop in heavyweight Apple weighing on the Nasdaq.

The Dow Jones Industrial Average lost 35.71 points (0.27 per cent) at 13,135.01.

The broad-market S&P 500 fell 5.87 points (0.41 per cent) to 1,413.58, while the tech-rich Nasdaq Composite shed 20.83 points (0.70 per cent) to 2,971.33.

Investors continued to fret about sharp tax hikes and spending cuts set to take effect in January if Washington fails to reach a deal to avert the so-called fiscal cliff, which economists say would drag the United States into recession.

“The stalemate in Washington over spending and taxes kept investors cautious. President Obama and House Speaker Boehner met last night, but both parties remain divided on how to avert the fiscal cliff,” Wells Fargo Advisors analysts said.

The technology sector dragged as Apple, the most valuable company by market capitalisation, dropped 3.8 per cent on the day it launched its iPhone 5 in China amid analyst concerns about a lack of consumer interest.

“Apple's weakness has been a major weight on the broader market given its size and how widely owned it is,” said Patrick O'Hare of Briefing.com.

Discovery Communications rose 0.9 per cent after striking a $1.7 billion deal to buy German television group ProSiebenSAT1's Nordic activities.

Best Buy meanwhile tumbled 14.7 percent as the troubled electronics retailer said its founder Richard Schulze would be given until February to make a takeover bid.

Oilfield services company Schlumberger skidded 5.0 percent after announcing higher than usual seasonal slowdowns in international markets and weaker activity in North America.

Pharmaceutical giant Pfizer fell 0.6 per cent. The Wall Street Journal reported it was considering a launch early next year of a roughly $4 billion US initial public offering for animal-health unit Zoetis Inc.

Bond prices rose. The 10-year US Treasury yield fell to 1.71 per cent from 1.73 per cent late Thursday, while the 30-year slipped to 2.87 per cent from 2.90 per cent.

Bond prices and yields move inversely.


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