Stock Gains Dented by Latest Twists in Fiscal Cliff Budget Talks

BoehnerBy MATTHEW CRAFT

NEW YORK -- An early gain on the stock market shrank Thursday after House Speaker John Boehner said little progress was being made in budget talks in Washington.

The Dow Jones industrial average had been up as much as 77 points in morning trading Thursday, then briefly turned negative after Boehner's remarks at 11:30 a.m. Eastern. Shortly after 1 p.m. the Dow was up 26 points at 13,011.

The Standard & Poor's 500 was up 4 points at 1,414 and the Nasdaq was up 15 at 3,006.

The market got off to a strong start following several positive economic reports, including a higher estimate of third-quarter U.S. economic growth, an increase in home sales and a drop in claims for unemployment benefits.

Following a meeting with Treasury Secretary Tim Geithner, Boehner told reporters that Democrats still haven't said which cuts they would accept to government benefit programs, suggesting a final budget deal remains a long way off. Republicans have said that they are open to increasing tax revenues as part of an agreement but only if they're accompanied by significant cuts to spending.

Investors have been closely following the talks between the White House and Congress over the "fiscal cliff," sharp government spending cuts and tax increases scheduled to start Jan. 1. New developments in the talks have whipsawed the market.

"It's a headline-watching market with this fiscal cliff," said David Brown, chief market strategist of the investment research firm Sabrient Systems.

Brown says the ongoing negotiations are likely to cause the stock market to take sudden turns in the weeks ahead. "But things seem to be moving in the right direction," Brown said. "I don't think either party wants to get pinned with hurting the market or the economy."

The up-and-down pattern in the market has left the Dow and S&P 500 little changed this week.

The Commerce Department raised its estimate for U.S. economic growth to an annual rate of 2.7 percent in the July-through-September period. That's much better than the 2 percent rate estimated a month ago and more than twice the 1.3 percent rate logged in the three previous months.

The Labor Department also reported that the number of Americans applying for unemployment benefits dropped to 393,000 last week, in line with what economists had expected. It was the second straight drop after Superstorm Sandy drove applications higher earlier this month.

Some retail stores posted poor sales numbers, driving their stocks lower. It's a critical time for retailers, who log a huge chunk of their yearly profits in the weeks running up to the holidays.

Kohl's plunged $5.41, or 10 percent, to $45.74, the most in the S&P 500 index. The company posted a drop in sales and said stores in the Mid-Atlantic and the Northeast, areas hit by Superstorm Sandy, fared the worst. Results at Target, The Gap, and others also fell short of Wall Street expectations.

Kroger Co. rose 82 cents to $25.88 after the supermarket chain reported stronger quarterly profits and raised its earnings outlook for the year. Stronger sales helped the operator of Fred Meyer and Food 4 Less stores post better results than analysts had expected.

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43 Comments

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whscms

bye bye weeping john

December 03 2012 at 10:16 AM Report abuse rate up rate down Reply
TODD

are you sure it wasn't because they haven't had a Twinkie for three days or maybe it was cloudy on wall street during their cocktail lunch.

November 29 2012 at 10:24 PM Report abuse -2 rate up rate down Reply
freethedems2012

Stop doing the twist on the fiscal cliff. That could be dangerous.

November 29 2012 at 10:21 PM Report abuse -5 rate up rate down Reply
HELLO DAVID

Boehner is an a**hole. He will do ANYTHING to NOT work with our President. If there are 4 more years of the republicans sitting on their hands..and doing NOTHING but voting "NO" on every good bill fro the Obama administration attempts to put through to help our country; then WE DEMAND THEY RESIGN IMMEDIATELY!
This cannot continue. Do they NOT realize that there is only 10% approval rating with congress? Then they have the audacity to give themselves 20-50% RAISES...before they left for Thanksgiving vacation??? ) America... call your Republican representatives and DEMAND they cooperate..or else we WILL fall of the fiscal cliff...and we will ALL suffer a HORRIFIC Depression..All for Republican Corporate GREED and Corruption!!!!! It has GOT to stop!!!

November 29 2012 at 9:45 PM Report abuse +6 rate up rate down Reply
2 replies to HELLO DAVID's comment
freethedems2012

It is their job to stop bad legislation. Obama should stop being sneaky. Dems are the corrupt ones.

November 29 2012 at 10:00 PM Report abuse -6 rate up rate down Reply
2 replies to freethedems2012's comment
pwood35009

Boehner is wrong and history proves it. At the end of WWII the top marginal rate was 94%, dropping down to around 70% over the next couple of decades. We had our most prosperous period ever. the last time we had rates this low and this much wealth concentrated at the top was the period leading up to the "Great Depression". It is not difficult to understand. Business requires customers. With most of the nation's wealth concentrated in the hands of a few at the top, only a few can afford to be customers.
The issue of increased taxes or large cuts was a central issue in the election. Boehner is advocating the same position Romney advocated. The nation rejected this approach.

November 29 2012 at 11:21 PM Report abuse +6 rate up rate down
drmaxchartrand

I agree---and I wouldn't call tiny advances "gains" after the past month's free fall.

November 30 2012 at 1:04 AM Report abuse rate up rate down
lpi2007

Resign, you idiots voted them in... But I truly believe that this election was set up before anyone went to the poles.... I know there's a lot of fat lazy welfare free loaders out there, also diaper head Muslims and Mexicans but how can anyone without smoking pot vote for the worst president in history again.... OMG lets all hope the Mayan's calendar is right....

November 29 2012 at 11:38 PM Report abuse rate up rate down Reply
HELLO DAVID

Boehner is an a**hole. He will do ANYTHING to NOT work with our President. If there are 4 more years of the republicans sitting on their hands..and doing NOTHING but voting "NO" on every good bill fro the Obama administration attempts to put through to help our country; then WE DEMAND THEY RESIGN IMMEDIATELY!
This cannot continue. Do they NOT realize that there is only 10% approval rating with congress? Then they have the audacity to give themselves 20-50% RAISES...before they left for Thanksgiving vacation??? (Little closeted-gay one from NC 10th District, Patrick McHenry..got a 46% Raise..and did absolutely NOTHING these last several years to help our country or to support of help his constituents) America... call your Republican representatives and DEMAND they cooperate..or else we WILL fall of the fiscal cliff...and we will ALL suffer a HORRIFIC Depression..All for Republican Corporate GREED and Corruption!!!!! It has GOT to stop!!!

November 29 2012 at 9:24 PM Report abuse +6 rate up rate down Reply
1 reply to HELLO DAVID's comment
freethedems2012

No matter how much nonsense you post, it still isn't true.

November 29 2012 at 10:01 PM Report abuse -4 rate up rate down Reply
HELLO DAVID

Boehner is an a**hole. He will do ANYTHING to NOT work wih our President. If there are 4 more years of the republicans sitting on their hands..and doing NOTHING but voting "NO" on every good bill fro the Obama administration attempts to put through to help our country; then WE DEMAND THEY RESIGN>>or better yet WE DEMAND their resignation!!!! This cannot continue. Do they NOT realize that there is only 10% approval rating with congress? Then they have the audacity to give themselves 20-50% RAISES...before they left for Thanksgiving vacation??? America... call your Republican representatives and DEMAND they cooperate..or else we WILL fall of the fiscal cliff...and we will ALL suffer a HORRIFIC Depression..All for Republican Corporate GREED and Corruption!!!!! It has GOT to stop!!!

November 29 2012 at 8:34 PM Report abuse +5 rate up rate down Reply
1 reply to HELLO DAVID's comment
freethedems2012

Sounds like you are the a##

November 29 2012 at 8:52 PM Report abuse -6 rate up rate down Reply
democrackso

Obamas still running around campaigning. That's all he knows how to do.

Obamas a disaster.

November 29 2012 at 7:36 PM Report abuse -4 rate up rate down Reply
democrackso

Blowhard Phasechump and Somehole what a trio. LOL

November 29 2012 at 7:34 PM Report abuse -3 rate up rate down Reply
democrackso

Somehole sells his foodstamps to pay for his internet service!!!

November 29 2012 at 7:32 PM Report abuse -3 rate up rate down Reply
democrackso

Blowhard and Somehole what a duo. LMAOOOOOOOOOOOOOOOOOOOOOOOOO

November 29 2012 at 7:31 PM Report abuse -3 rate up rate down Reply