Wall Street continues to drop in budget stalemate

Stocks on Wall Street slumped in a fourth-straight session but recovered sharply toward the end as hopes rose of a budget settlement.

This followed reports that the House of Representatives plans to reconvene on Sunday. That might allow time to prepare for the so-called fiscal cliff, the set of tax hikes and spending cuts set to start in January unless lawmakers can make an alternative arrangement.

According to news reports, frenzied phone calls are being made among political leaders, including President Obama, who has cut short his Hawaiian holiday to be be in Washington and achieve a breakthrough.

One Republicasn aide was quoted in the Wall Street Journal as saying the first House vote is set for 6.30pm on Dunday, though the subject of the vote isn't known.

The Republicans have the majority in the House, while the Democrats rule the Senate. Earlier, Democratic Senate Majority Leader Harry Reid said it looked like the US was headed over the cliff, putting the blame on Republicans opposed to tax cuts.

Adding to the fiscal drama, the US Treasury Department says the country's legal borrowing limit will be reached by Monday but some emergency measures can keep the government operating for several more weeks if needed.

The budget uncertainty is weighing on Americans' feelings about their future, according to the Conference Board, whose consumer confidence index has fallen to its lowest level since August.

Other economic data were more upbeat. New home sales rose in November to their highest level in more than two years, while the number of US workers filing applications for jobless benefits fell last week.

At the market close, the Dow Jones Industrial Average was down 18.20 points, or 0.1%, at 13,096.39 after being down more than 100 points earlier in the session.

The S&P 500 finished down 0.1% to 1418.08 and the Nasdaq Composite was also down 0.1% to 2985.91.

Other markets: Europe, Asia up
European markets gained some ground. The Stoxx Europe 600 rose 0.3% as markets reopened from a two-day Christmas break.

Better-than-expected Italian manufacturing confidence data boosted the FTSE Mib index in Milan by 0.9%.

Asian markets were mostly higher as hopes for more aggressive stimulus measures in Japan continued to provide a spark. The Nikkei Stock Average climbed 0.9% to the highest level since March 10, 2011, the day before the country was hit by a massive earthquake and tsunami.

In currency trading, the US dollar hit a 28-month high against the yen, but was little changed against the euro.

In commodities, February crude-oil futures rose less than 0.1% to $US91 a barrel, while January gold futures gave up 0.3% to $US1655.10 an ounce.

Got a question about this story? Leave it in Comments & Questions below.

This article is tagged with the following keywords. Find out more about MyNBR Tags

Comments & Questions

Commenter icon key: Subscriber Verified

Post New comment or question

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.

NZ Market Snapshot


Sym Price Change
USD 0.7011 0.0009 0.13%
AUD 0.9187 0.0002 0.02%
EUR 0.6101 -0.0001 -0.02%
GBP 0.4795 0.0004 0.08%
HKD 5.4376 0.0095 0.18%
JPY 74.7100 0.3590 0.48%


Commodity Price Change Time
Gold Index 1292.7 26.930 2016-04-29T00:
Oil Brent 47.4 0.530 2016-04-29T00:
Oil Nymex 45.9 -0.080 2016-04-29T00:
Silver Index 17.8 0.269 2016-04-29T00:


Symbol Open High Last %
NZX 50 6820.6 6820.6 6820.6 -0.42%
NASDAQ 4805.8 4807.9 4805.3 -0.62%
DAX 10091.2 10148.7 10039.0 0.85%
DJI 17813.1 17814.8 17830.8 -0.32%
FTSE 6322.4 6322.4 6322.4 -1.27%
HKSE 21215.2 21235.4 21388.0 -1.50%
NI225 16357.1 16357.1 16666.0 -3.11%

Most listened to

What's the story behind the story? Our special feature audio offers a mix of comment from journalists, experts and panel discussions.
  1. Jason Paris on Lightbox, and avoiding the 'race to the bottom'
  2. The idea Hilary Barry’s resignation will result in boardroom bloodshed is arrant nonsense, says NBR’s Nick Grant
  3. The Icehouse’s Andy Hamilton says GIVs should attract American billionaires like Julian Robertson
  4. Nevil Gibson discusses the spiralling descent of the Venezuelan economy in his latest Editor’s Insight
  5. Rob Hosking on what to expect from this week's unemployment data