U.S. Stocks Decline as Greek Aid, Fiscal Cliff Talks Drag

Nichole Harper
26 Nov, 2012
New York City

Stocks in New York traded lower after White House economists warned the impact of sudden one-time tax increase on middle-income tax payers. Retailers were in focus after the strong start of holiday retail sales. SEC Chairman Mary Schapiro decided to step down from December 14.

[R]4:00 PM, New York – Stocks in New York traded lower after White House economists warned the impact of sudden one-time tax increase on middle-income tax payers. Retailers were in focus after the strong start of holiday sales. SEC Chairman Mary Schapiro decided to step down from December 14.[/R]

Stocks in New York traded lower after economists warned that a sudden increase in taxes next year could reduce consumer spending by $200 billion. Retailers reported surge in holiday shoppers as discounts and early hours drove consumers to stores.

U.S. Securities and Exchange Commission Chairman Mary Schapiro said she will step down from the regulatory agency from December 14.

Schapiro will be replaced by Commissioner Elisse Walter, former senior executive vice president at the Financial Industry Regulatory Authority, according to a statement released by the White House.

The SEC is struggling to enact and enforce new rules and practices required under a flood of mandates generates by the Dodd-Frank Act. SEC has been criticized during Schapiro’s tenure not going after chief executives of large banks and brokerage houses that contributed to the financial crisis that peaked in September 2008.

Retailers in Focus

Retailers were in focus after spending in stores and online increased 13% to $59.1 billion in four days to Sunday, the National Retail Federation said in a statement today. Sales in the year-ago period increased 16%.

Macy’s ((M)) declined 4%, Abercrombie & Fitch ((ANF)) gained 0.5% and Coach ((COH)) fell 3.5%.

McGraw Hill Cos ((MHP)) gained 1.4% after the company agreed to sell its educational division that includes traditional and digital text books unit to a private equity group Apollo Group for $2.5 billion.

UnitedHealth ((UNH)) declined 2% after the company said in a regulatory filing that its 2013 earnings will not be more than $5.50 a share.

DreamWorks ((DWA)) declined as much as 6% after its latest film release “Rise of the Guardians” opened with weekend sales of $24 million according to Hollywood.com.

European markets declined across the region as finance ministers meet one more time to agree on the next bailout release. Barclays fell 4% after Qatar based sovereign fund sold its remaining Barclays warrants.

Canadian to Head Bank of England

Bank of Canada Governor Mark Carney was unexpectedly appointed as head of the Bank of England, announced Chancellor of Exchequer George Osborne. The first non-UK citizen to head the 318-year old institution as the central bank expands it role in overseeing financial services institutions and manage risk across the financial system.

Stocks in Tokyo closed higher and the yen traded near 8-month low on the rising speculation that the central bank may be forced to take additional measures to stimulate the economy and weaken the yen. Fitch lowered credit rating of Panasonic and Sony to junk level.

Australian benchmark index closed higher and the dollar edged up. Australians are expected to spend $16 billion during the holiday season. Moody’s lowered its outlook on credit rating of Queensland.

Commodities, Bonds and Currencies

U.S. treasury yield on 10-year bond increased to 1.64% and on 30-year bond closed up to 2.78%.

The U.S. dollar inched lower to $1.297 to a euro and increased against the Japanese yen to 82.12 yen. Indian rupee traded at a new low of 55.95 against one dollar as the inflation remains high and elevated oil prices consume most of the imports of the nation.

Immediate delivery futures of Texas crude oil decreased 62 cents to $87.66 a barrel and Brent crude fell 57 cents to $110.81, futures of natural gas decreased 0.15 cents to $3.75 per mbtu and gasoline traded down 1.75 cents to 272.64 cents a gallon.

In metals trading, gold decreased $2.20 to $1,749.20 per ounce and silver decreased 9 cents to $34.12.