In the News
Here We Go Again: Stock Slide Gains Steam
After yesterday’s carnage in the stock market, strategists warned bouncing back wouldn’t be easy. Sure enough, today’s slide is starting to pick up some steam in early afternoon trading.
The Dow recently fell 93 points, or 0.7%, to 12840, which comes one day after the blue-chip index tumbled 312 points - the worst drop of the year - following President Obama’s reelection. Cisco Systems CSCO -0.18% McDonald's MCD +0.05% - which reported its first monthly sales drop in nine years - and Home Depot HD +0.50% are leading the declines, as lingering worries over the looming fiscal cliff are outweighing better-than-expected labor-market and export data.
The S&P 500 is down 0.9% to 1382 (so much for holding that psychologically important 1400 level). The tech-heavy Nasdaq Comp is off 0.8% at 2913 Apple Inc. AAPL +0.57% shares are down nearly 3%, and have now fallen 22% in less than two months.
"The negative equity trade is building steam," warns Andrew Brenner, global head of international fixed income at National Alliance. "Bonds are gaining traction as the world is becoming more negative on both Europe and the U.S."
With regard to the fiscal cliff, Brenner says investors are fearing potentially higher dividend and capital-gains taxes, which continues to hurt the market.
"The fear is building that the fiscal cliff will hurt equities as it hurts the economy," he says.
Until these matters get sorted out, or at the very least Congress shows it’s taking steps in the right direction to address the issue, expect investors to continue fretting about this state of limbo leading up to the expiration of the tax cuts.