Wall Street Falls as Nation Grieves
Wall Street halted its most recent upward move, moving lower on concerns that the clock is ticking on the fiscal cliff. In all reality, a deal needs to get done this week to enable the legislative process enough time to enact legislation before the holiday recess. Of course the cliff has taken a back seat to the tragedy befalling Newtown Connecticut and the nation as a whole. Upbeat economic data,including a rebounding in industrial production post-Sandy wasn’t enough to lift the major averages as the Dow Jones Industrial Average lost 35.71 points, or 0.3%, to 13,135.01. The S&P 500 index declined 5.87 points, or 0.4%, to 1,413.58, with technology the leading laggard and natural-resources the best performing of its 10 industry sectors. the Nasdaq Composite lost 20.83 points, or 0.7%, to 2,971.33. It was the first losing week in four for the blue chips and S&P. The Dow lost 0.2% while the S&P fell 0.3%. The tech heavy Nasdaq, led by Apple Inc. (AAPL), which lost 4.4% on the week, fell for the second consecutive week.
Oil for January delivery gained 84 cents, or 1%, to settle at $86.73 a barrel on the New York Mercantile Exchange. It was the second consecutive weekly gain for the front month contract, which advanced 0.9% on the week. Gold added 20 cents, or 0.04% to settle at $1,697.50. The precious metal finished down on the week, ending 0.5% lower.
The main domestic news on the session cam on the inflation front. The consumer price index posted a very encouraging reading. With the Fed coming out and stating an inflation target of 2.5%, any sub optimal reading is bullish for additional monetary stimulus. Consumer price inflation dropped in November on lower energy costs and the core rate softened. The consumer price index in November fell 0.3 percent, following a 0.1 percent increase the month before. The latest number posted lower than the consensus forecast for down 0.2 percent. Excluding food and energy, the CPI rose 0.1 percent, following a boost of 0.2 percent in October. The median market forecast was for a 0.2 percent rise. Year-on-year, overall CPI inflation came in at 1.8 percent versus 2.2 percent in October, while the core rate eased YoY to 1.9 percent in November from 2.0 percent the prior month.