NEW YORK: US stocks fell yesterday, with the Nasdaq weighed down by another drop in shares of Apple, and as the overhang of “fiscal cliff” negotiations kept buying to a premium.
Apple slid 4 percent to $508.75 after UBS cut its price target on the stock to $700 from $780. The most valuable US company has seen its stock hit hard in the last three months, and it fell on Friday after a tepid reception for iPhone 5 in China.
The S&P Information Technology Index dropped 0.9 percent as Apple fell and Jabil Circuit Inc lost 6.2 percent to $17.38 after UBS cut its price target.
The possibility of a “fiscal cliff” deal not taking place until early 2013 is rising. The back-and-forth negotiations over the fiscal cliff in Washington have kept markets on hold in what would already be a quiet period for stocks. “We’re faced with uncertainty ... and that’s going to continue now into January. It basically puts everybody on hold, and (you) just have the markets kind of thrash around,” said Larry Abruzzi, senior equity trader at Cabrera Capital Markets Inc in Boston.
President Barack Obama and House of Representatives Speaker John Boehner held a “frank” meeting on Thursday at the White House to discuss how to avoid the tax hikes and spending cuts set to kick in early in 2013.
The S&P 500 dropped 0.6 percent on Thursday after six straight positive sessions. Investors are concerned that going over the cliff could tip the economy back into recession. While a deal is expected to ultimately be reached, a drawn-out debate - like the one seen over 2011’s debt ceiling - can erode confidence.
“The markets are not being reactionary right now, though we lost ground yesterday,” said Stephen Carl, head equity trader at the Williams Capital Group in New York.
The Dow Jones industrial average slipped 24.09 points, or 0.18 percent, to 13,146.63. The Standard & Poor’s 500 Index lost 4.81 points, or 0.34 percent, to 1,414.64. The Nasdaq Composite Index fell 15.50 points, or 0.52 percent, to 2,976.66.
Best Buy Co Inc slid 15.5 percent to $11.93 after the electronics retailer agreed to extend the deadline for the company’s founder to make a bid. Shares jumped as much as 19 percent on Thursday after initial reports of a bid this week from founder Richard Schulze.
Europe’s main stock markets closed narrowly mixed yesterdday, with London’s FTSE 100 index of leading companies giving up 0.13 percent to 5,921.76 points.
Frankfurt’s DAX 30 added 0.19 percent to 7,596.47 points, while in Paris the CAC 40 was flat at 3,643.28 points.
Reuters
