Stocks have moved mostly lower over the course of the trading day on Thursday, extending the downward move seen over the past few sessions. Worries about the looming fiscal cliff continue to weigh on the markets.
The major averages are currently posting notable losses, near their worst levels of the day. The Dow is down 90.08 points or 0.7 percent at 13,024.51, the Nasdaq is down 26.14 points or 0.9 percent at 2,964.02 and the S&P 500 is down 11.66 points or 0.8 percent at 1,408.17.
The weakness on Wall Street comes amid continued indications that lawmakers will be unable to reach a budget agreement, with Senator Majority Leader Harry Reid, D-Nev., saying it "looks like" the country is headed over the fiscal cliff in a speech on the Senate floor.
Reid sought to blame House Speaker John Boehner, R-Ohio, for the predicament and once again urged the Republican leader to allow the House to vote on a Senate-approved bill extending the tax cuts on income up to $250,000 a year.
While President Barack Obama has returned to Washington after spending Christmas in Hawaii, traders seem pessimistic about the negotiations as the year-end deadline draws closer.
Unless Congress acts, approximately $600 billion in automatic tax increases and government spending cuts are due to go into effect at the end of the year.
Reflecting the potential impact of going over the cliff, the Conference Board released a report showing that U.S. consumer confidence fell to a four-month low in December amid a substantial deterioration in expectations for the months ahead.
The Conference Board said its consumer confidence index fell to 65.1 in December from a downwardly revised 71.5 in November. Economists had been expecting the index to dip to 70.0 from the 73.7 originally reported for the previous month.
Meanwhile, traders have largely shrugged off a separate report from the Labor Department showing an unexpected drop in initial jobless claims in the week ended December 22nd.
The report said initial jobless claims fell to 350,000, a decrease of 12,000 from the previous week's revised figure of 362,000. The drop came as a surprise to economists, who had expected jobless claims to edge up to 365,000 from the 361,000 originally reported for the previous week.
The Commerce Department also released a report showing a rebound by November new home sales, which reached their highest level in over two years.
Banking stocks are turning in some of the market's worst performances on the day, resulting in a 1.4 percent drop by the KBW Bank Index. With the loss, the index is pulling back further off the more than one-year closing high it set last Thursday.
Financial giants Bank of America (BAC) and JP Morgan (JPM) are posting notable losses, falling by 2.3 percent and 1.9 percent, respectively.
Significant weakness has also emerged among networking stocks, as reflected by the 1.4 percent loss being posted by the NYSE Arca Networking Index. Ciena (CIEN) and Tellabs (TLAB) are turning in two of the sector's worst performances.
Natural gas, oil service, and computer hardware stocks have also come under pressure, moving to the downside along with most of the major sectors.
Meanwhile, gold stocks are bucking the downtrend by the broader markets, benefiting from a modest increase by the price of the precious metal.
In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Thursday. Japan's Nikkei 225 Index advanced by 0.9 percent, while Hong Kong's Hang Seng Index rose by 0.4 percent.
The major European markets are also moved to the upside on the day. While the U.K.'s FTSE 100 Index closed only just above the unchanged line, the German DAX Index edged up by 0.3 percent and the French CAC 40 Index climbed 0.6 percent.
In the bond market, treasuries have moved notably higher amid the worries about the fiscal cliff. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, has fallen by 3.6 basis points to 1.722 percent.
by RTT Staff Writer
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