US stocks nearly unchanged as fiscal threat looms

Associated Press Modified: November 12, 2012 at 5:15 pm •  Published: November 12, 2012
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U.S. stocks closed nearly unchanged Monday, after a day of uneven trading plagued by investors' fears about the approaching "fiscal cliff."

The Dow Jones industrial average finished down 0.31 point at 12,815.08, according to data available at 6 p.m. EST. It had spent the day alternating between small gains and losses, never rising more than 46 points or falling more than 32.

The closing level of the Dow was revised several times after trading closed. The New York Stock Exchange had experienced a trading glitch during the day, forcing it to alter its normal procedure for determining the closing prices of some stocks.

The Standard & Poor's 500 index edged up 0.18 point to 1,380.03. The Nasdaq composite fell 0.61 to 2,904.26.

Trading was very light. The federal government and the U.S. bond market were closed for Veterans Day, and no economic reports were released.

The fiscal cliff refers to government spending cuts and tax increases that are scheduled to kick in at the beginning of the new year, unless a divided Congress and the White House can work out a compromise before then.

Some traders thought the tentative trading action was nearly inevitable because there has been no positive or negative news about the economy or the possibility of a deal to avoid the fiscal cliff.

"Nothing good is going on," said Scott Freeze, president of Street One Financial in Huntingdon Valley, Pa. "Everything forward-looking remains dreary."

Last week, after voters returned a long-deadlocked and divided government to Washington, the Dow dropped 434 points in two days and had one of its worst weeks of the year.

Even if lawmakers work out a compromise, as they usually do, the political fight until then is sure keep investors on edge, pitching the stock market back and forth until it's resolved. Economists say the cliff could cost the economy $800 billion and 3 million jobs and would plunge the U.S. back into recession.

President Barack Obama, a Democrat, and House Speaker John Boehner, a Republican, have spoken of compromise but appear to be taking firm stances on some issues. Obama will meet with labor representatives as well as other progressive groups Tuesday. He'll hold separate meetings with the business community Wednesday.

The effect on the markets has been widespread. Fiscal cliff worries were blamed for keeping a lid on European markets and Asian markets, which closed mostly lower.

In Greece, lawmakers passed a new austerity budget, and the country's international lenders drafted a report saying it had made progress in righting its finances. Greece is hoping the other euro countries will give it another $40 billion in bailout loans. The budget and the report are crucial steps toward that goal.

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