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Stocks May Come Under Pressure Amid Focus On Washington - U.S. Commentary

Stocks May Come Under Pressure Amid Focus On Washington - U.S. Commentary
12/28/2012 8:53 AM ET

After ending the previous session roughly flat, stocks are likely to move to the downside in early trading on Friday. The major index futures are currently pointing to a lower open for the markets, with the Dow futures down by 62 points.

Lingering concerns about the looming fiscal cliff are likely to weigh on the markets after conflicting headlines about the budget negotiations contributed to the volatility seen in the previous session.

While pessimistic comments from Senate Majority Leader Harry Reid, D-Nev., pushed stocks sharply lower in morning trading on Thursday, the markets staged a recovery attempt after Republican leaders said the House will reconvene Sunday evening.

Traders are likely to keep a close eye on any developments in Washington, with President Barack Obama scheduled to meet with Congressional leaders later in the day.

Reid, Senate Minority Leader Mitch McConnell, R-Ken., House Speaker John Boehner, R-Ohio, and House Minority Leader Nancy Pelosi, D-Calif., are all due to meet at the White House along with Vice President Joe Biden.

Some investors may look to move their money into safe havens, as the year-end fiscal cliff deadline is less than four days away.

Unless lawmakers reach an agreement, approximately $600 billion in automatic tax increases and government spending cuts are due to go into effect at the end of the year.

Among individual stocks, Aeterna Zentaris (AEZS) is moving higher in pre-market trading after the biotech company said it has reached an agreement with the FDA on a Special Protocol Assessment for an upcoming Phase 3 registration trial in endometrial cancer with its doxorubicin peptide conjugate.

After moving sharply lower over the course of morning trading on Thursday, stocks staged a substantial recovery attempt late in the session before ending the day roughly flat. Uncertainty about the looming fiscal cliff contributed to the volatility on Wall Street.

The major averages briefly peeked into positive territory in the final hour of trading but finished the session in the red. The Dow edged down 18.28 points or 0.1 percent to 13,096.31, the Nasdaq slipped 4.25 points or 0.1 percent to 2,985.91 and the S&P 500 dipped 1.74 points or 0.1 percent to 1,418.09.

While the major averages ended the session well off their worst levels, the modest losses on the day still extended a recent downward move.

In overseas trading, stock markets across the Asia-Pacific region moved to the upside during trading on Friday. Japan's Nikkei 225 Index rose 0.7 percent to its best closing level in well over a year, while Hong Kong's Hang Seng Index edged up by 0.2 percent.

Meanwhile, the major European markets have turned lower over the course of the trading day. While the French CAC 40 Index has fallen by 0.9 percent, the U.K.'s FTSE 100 Index and the German DAX Index are both down by 0.6 percent.

In commodities trading, crude oil futures are edging up $0.18 to $91.07 a barrel after slipping $0.11 to $90.87 a barrel on Thursday. An ounce of gold is currently valued at $1,659.30, down $4.60 from the previous session's close of $1,663.70. In the previous session, gold rose $3 an ounce.

On the currency front, the U.S. dollar is trading at 86.04 yen compared to the 86.10 yen it fetched at the close of New York trading on Thursday. Against the euro, the dollar is valued at $1.3216 compared to yesterday's $1.3235.

by RTT Staff Writer

For comments and feedback: editorial@rttnews.com

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