US stocks dip on fiscal cliff worries

2012-12-05 07:54

New York - US stocks closed slightly lower on Tuesday as Washington continued to wrangle over a budget plan that would avoid the year-end "fiscal cliff."

The Dow Jones Industrial Average closed at 12,951.78, down 13.82 points.

The broad-market S&P 500 dipped 2.41 points to 1,407.05 while the tech-rich Nasdaq Composite fell 5.51 to 2,996.69.

"Equities finished the day in slightly negative territory as continued worries of the fiscal cliff dominated financial headlines and no major economic reports were released today," said Charles Schwab & Co analysts.

Tuesday's lacklustre trade came after the stock indexes started December in loss mode on Monday, with the budget impasse weighing on sentiment and fears that the world's largest economy could go over the "fiscal cliff" and into recession if no deal is reached by the end of the year.

Stocks in focus on Tuesday included apparel retailer Gap, which was among the most heavily traded shares, and lost 10.3%.

Netflix shares jumped 14% after the online television service struck an exclusive deal to stream live-action animated feature films from The Walt Disney Studios. Disney shares were flat.

After announcing the launch of its iTunes stores in 56 additional countries, Apple fell 1.8%.

Investors also had their eyes on Oracle Corp, which gained 0.2%, after its announcement it would accelerate dividend payments for three fiscal 2013 quarters - originally slated to be paid next year - to later this month.

Chipmaker Qualcomm edged up 0.2% after striking a capital injection deal with cash-strapped Japanese electronics giant Sharp.

US health care giant Baxter International meanwhile fell 0.9% after announcing it will buy Swedish dialysis products firm Gambro for $4bn.

Home builder Toll Brothers, which reported quarterly earnings that were above analysts' estimates, slipped 1.8%.

Autozone tumbled almost 3%. The auto retailer posted fiscal first-quarter profits that topped expectations.

Bond prices rose. The 10-year US Treasury yield slipped to 1.61% from 1.62% earlier on Tuesday, while the 30-year dropped to 2.78% from 2.81%.

Bond prices and yields move inversely.