U.S. stocks fall on budget concerns; Dow Jones down 0.31%
Investing.com - U.S. stocks opened lower in holiday-thinned
trade on Monday, as concerns over the deadlock in U.S. budget
negotiations weighed on investor confidence.
Trading was expected to remain subdued as many investors already closed books to lock in profit before the end of the year, reducing liquidity in the market.
During early U.S. trade, the Dow Jones Industrial Average fell 0.31%, the S&P 500 index retreated 0.29%, while the Nasdaq Composite index declined 0.30%. U.S. equity markets were set to close early at 13:30EST (18:30 GMT).
Market sentiment remained under pressure as investors continued to monitor developments surrounding the fiscal cliff in the U.S., approximately USD600 billion in automatic tax hikes and spending cuts due to come into effect on January 1.
Doubts over whether a deal will be reached ahead of the year-end intensified late Thursday after House Speaker John Boehner pulled his so-called "Plan B" fiscal cliff option, which called for tax increases only on Americans earning USD1 million or more per year, because his Republican colleagues did not support the legislation.
The U.S. House has adjourned for the Christmas holiday, fueling speculation that policymakers will not be able to avert the fiscal cliff. Without a deal, the U.S. could fall back into recession and drag much of the world down with it.
Adding to concerns, Italian Prime Minister Mario Monti tendered his resignation after only 13 months in office, paving the way for a highly uncertain national election in February.
Microsoft saw shares drop 0.77% after the New York Times reported that sales of the company's new Windows 8 operating system disappointed PC makers as well as analysts.
In the same sector, U.S. traded shares of Research In Motion plummeted 1.01% after Exane BNP Paribas cut its target price on the BlackBerry maker to USD5.50 from USD8.30.
In Internet-linked stocks, Facebook rose 0.34% after Needham raised its price target on the social media giant to USD33 from USD25.
Elsewhere, financial stocks were broadly lower, as shares in JP Morgan inched down 0.02% and Bank of America slipped 0.18%, while Goldman Sachs and Citigroup declined 0.54% and 0.76% respectively.
Across the Atlantic, European stock markets were steady in lackluster Christmas Eve activity.
France's CAC 40 shed 0.22%, while London's FTSE100 added 0.18% in a holiday-shortened session. Markets in Germany remained closed for Christmas Eve.
During the Asian trading session, regional markets eased up in thin pre-holiday trade, as investors continued to monitor negotiations among U.S. lawmakers to avoid the looming "fiscal cliff" crisis ahead of the year-end deadline.
Hong Kong's Hang Seng Index ended up 0.2%, while Australia's ASX/200 Index settled 0.3% higher, as both markets traded in a holiday-shortened session ahead of a two-day break.
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