By Kate Gibson, MarketWatch
NEW YORK (MarketWatch) — U.S. stocks ended little changed Friday, with
the Nasdaq Composite scoring its first positive November since 2009 as
the political rhetoric over the budget continued.
“I don’t think there is a politician out there that wants on their watch
an adverse economic outcome. But they could wait for the 11th hour,”
Nick Raich, director of Key Private Bank in Cleveland, said of the
possible repercussions of not reaching an agreement to block billions in
automatic spending cuts and tax increases early next year.
“Our base case is there will be some sort of solution, but it may not
occur by or on Dec. 31, so the market is not pricing completely going
off the cliff, but more of a roll down the hill,” Raich added.
The Dow Jones Industrial Average
DJIA
+0.03%
rose 3.76 points to 13,025.58, leaving it 0.1% higher for the week and off 0.5% from the month-ago close.
Read: November’s 5 best and worst Dow stocks.
Up 0.5% for the week and 0.3% for the month, the S&P 500 Index
SPX
+0.02%
finished with a fractional gain at 1,416.18, with the technology sector
hardest hit and defensive industries the best performing.
The Nasdaq Composite
COMP
-0.06%
fell less than 2 points to 3,010.24, up 1.5% for the week and 1.1% for the month.
Advancers edged just ahead of decliners on the New York Stock Exchange,
where nearly 1.2 billion shares traded. Composite volume neared 3.9
billion.
The U.S. dollar
DXY
+0.03%
edged lower against other currencies, excluding the Japanese yen
USDJPY
-0.0169%
, which fell to its lowest level against the greenback since the spring.
Treasury prices were mixed, with the yield on the benchmark 10-year note
10_YEAR
+0.19%
used in determining mortgage rates and other consumer loans at 1.62%.
Friday’s economic reports had consumer spending unexpectedly falling and
incomes flat in October as Hurricane Sandy and its aftermath prevented
many from working and shopping in the Northeast.
“All the focus for December is going to be the cliff. Data is what
happened in the past, but if we go off the cliff, what does it mean for
the future? Stocks are worried about what is going to happen to 2013-14
earnings estimates,” according to Raich.
President Barack Obama on Friday traveled to a Pennsylvania toy factory
where he warned “prolonged negotiations” were likely ahead, and
reiterated his call for lawmakers to extend Bush-era tax cuts for
middle-income Americans. In Washington, House Speaker John Boehner held a
news conference not long after Obama spoke, with the Ohio Republican
declaring the budget talks at a “stalemate,” and criticizing the White
House for not making a serious offer for a compromise.
“Taxes are going higher and spending cuts are coming. [Federal Reserve
Chairman] Ben Bernanke has given us almost 100% clarity on monetary
policy, and the market appears to want to go higher if we get some
clarity on the fiscal side,” said Raich.
Kate Gibson is a reporter for MarketWatch, based in New York.
