US close: Stocks fall as fiscal cliff fears weigh heavily



LONDON (ShareCast) - US stocks took a hit on Monday, with the Dow Jones (DJI: ^DJI - news) taking the biggest hit as fears grow over the country's leaders' ability to come to an agreement on how to deal with the so-called 'fiscal cliff', which is now looming large.

Lawmakers in the US have voiced concerns that the country will fall off the 'fiscal cliff' in nine days as it is yet to reach a budget deal that would prevent considerable spending cuts and tax hikes.

Chief market strategist at Banyan Partners, Robert Pavlik, was quoted as saying: "There are very few days left in this calendar year, and the rhetoric out of Washington is they are hopeful, yet there is no progress towards getting a deal done.

"A lot of folks are fed up with these politicians not being able to work for the benefit of their constituents. We're telling Europe one thing and we can't get our own house in order."

Leaders have fuelled fears that they won't meet the January 1st deadline following reports that President Obama and opposition leader John Boehner are not talking and are out of town for the Christmas holidays.

Last week Boehner was unable to gain the backing of his fellow Republicans on the so-called 'Plan B' package, which had been put forward to increase tax to raise over $1.0m each year.

Leaders are currently say there is still time to strike a deal, but admitted that time is limited.

Company news

It has been revealed that social networking site Facebook (NasdaqGS: FB - news) paid just £2.9m in tax on non-US profits of £840m through specific accounting techniques. All of the company's non-US generated profits are directed through Facebook Ireland and the figures show as a result of an accounting technique known as the 'Double Irish', meaning the company could transfer signifcant sums of money to other subsidiaries via royalty payments.

Alexza Pharmaceuticals (NasdaqGM: ALXA - news) shares spent the day firmly in the red as they settled back down after it was announced on Friday that one of its drug treatments for mental health disorders was approved by the Food and Drug Administration.

HLF Herbalife was also a big faller today after Pershing Square Capital Management hedge-fund manager Bill Ackman announced that he had taken a huge short position in the shares.

Retailers appear to be suffering in the glare of the looming fiscal cliff with shoppers reluctant to spend as much as usual ahead of Christmas. Accoring to ShopperTrak, sales growth in the week ended December 15th was around four per cent lower than that seen in the same period the previous year.

Looking abroad

UK and European markets ended their half-day session modestly higher, with London-listed miners putting in a decent performance throughout the morning.

Italian Prime Minister Mario Monti has declared he would consider being a candidate for a coalition backing his economic agenda. However he said he won't run in the country's elections in February.

Meanwhile, opponents have accused Egyptian President Mohamed Mursi of potentially ruining his chances of saving the country's wailing economy by fast-tracking the constitution through to a referendum.

The opposition said he lost the vote from people concerned by the text that was drafted by an Islamist-dominated assembly. The government will find it more difficult to implement reforms in securing a $4.8bn loan from the International Monetary Fund without broader support.

Other markets

Front month West Texas Intermediate crude futures fell by 0.18% to $88.50 a barrel in NYMEX trading.

10-year US Treasury bond yields are now up by one basis point at the 1.77% level.

S&P 500 - Risers
Ford Motor Co (NYSE: F - news) . (F) $12.40 +4.55%
Lam Research Corp. (LRCX) $36.95 +1.96%
Yum! Brands Inc. (YUM) $65.01 +1.77%
Alexion Pharmaceuticals Inc (NasdaqGS: ALXN - news) . (ALXN) $95.39 +1.61%
Electronic Arts Inc (NasdaqGS: EA - news) . (EA) $14.11 +1.58%
Yahoo (NasdaqGS: YHOO - news) ! Inc. (YHOO) $19.65 +1.55%
PPG Industries Inc (NYSE: PPG - news) . (PPG) $135.22 +1.47%
J.C. Penney Co. Inc. (JCP (Taiwan OTC: 4747.TWO - news) ) $19.87 +1.43%
Vulcan Materials Co. (VMC) $52.97 +1.36%
Masco Corp. (MAS) $16.49 +1.35%

S&P 500 - Fallers
Advanced Micro Devices Inc (NYSE: AMD - news) . (AMD) $2.48 -4.25%
Alpha Natural Res (ANR) $9.03 -2.69%
Apollo Group Inc (NasdaqGS: APOL - news) . (APOL) $20.25 -2.50%
Hewlett-Packard Co. (HPQ) $14.01 -2.30%
Dean Foods Co. (DF) $16.19 -2.23%
Staples Inc (NasdaqGS: SPLS - news) . (SPLS) $11.28 -2.17%
First Solar Inc (Xetra: A0LEKM - news) . (FSLR) $30.26 -2.13%
Nabors Industries Ltd (NYSE: NBR - news) . (NBR) $14.29 -2.12%
DeVry Inc (NYSE: DV - news) . (DV) $23.26 -1.98%
Red Hat Inc (NYSE: RHT - news) . (RHT) $53.98 -1.84%

Dow Jones I.A - Risers
Alcoa Inc (NYSE: AA - news) . (AA) $8.62 +0.58%
Home Depot Inc. (HD) $61.57 +0.41%
AT&T Inc. (T) $33.74 +0.21%
3M Co. (MMM) $93.19 +0.10%

Dow Jones I.A - Fallers
Hewlett-Packard Co. (HPQ) $14.01 -2.30%
Microsoft Corp. (MSFT) $27.06 -1.42%
McDonald's Corp. (MCD) $89.29 -0.99%
Chevron Corp. (CVX) $108.63 -0.98%
Cisco Systems Inc (NasdaqGS: CSCO - news) . (CSCO) $19.83 -0.65%
Travelers Company Inc. (TRV) $72.36 -0.63%
Intel Corp. (INTC) $20.64 -0.60%
International Business Machines Corp. (IBM (NYSE: IBM - news) ) $192.40 -0.53%
Caterpillar Inc (NYSE: CAT - news) . (CAT (Taiwan OTC: 4990.TWO - news) ) $87.48 -0.48%
Coca-Cola Co. (KO) $36.72 -0.46%

Nasdaq 100 - Risers
Warner Chilcott Plc (NasdaqGS: WCRX - news) (WCRX) $11.94 +2.23%
Lam Research Corp. (LRCX) $36.95 +1.96%
Green Mountain Coffee Roasters Inc (Xetra: 887856 - news) . (GMCR) $41.87 +1.85%
Alexion Pharmaceuticals Inc. (ALXN) $95.39 +1.61%
Electronic Arts Inc. (EA) $14.11 +1.58%
Yahoo! Inc. (YHOO) $19.65 +1.55%
News Corp (NasdaqGS: NWS - news) . Class A (NWSA) $25.15 +0.80%
Perrigo Company (NasdaqGS: PRGO - news) (PRGO) $103.56 +0.76%
Virgin Media Inc (NasdaqGS: VMED - news) . (VMED) $36.69 +0.74%
CA Inc. (CA) $22.34 +0.68%

Nasdaq 100 - Fallers
Research in Motion Ltd. (RIMM) $10.61 -2.75%
Apollo Group Inc. (APOL) $20.25 -2.50%
Staples Inc. (SPLS) $11.28 -2.17%
Baidu Inc (NasdaqGS: BIDU - news) . (BIDU) $96.77 -1.96%
Dell Inc (NasdaqGS: DELL - news) . (DELL) $10.24 -1.82%
Micron Technology Inc (NasdaqGS: MU - news) . (MU) $6.23 -1.42%
Microsoft Corp. (MSFT) $27.06 -1.42%
Intuitive Surgical Inc (NasdaqGS: ISRG - news) . (ISRG) $489.73 -1.42%
F5 Networks Inc (NasdaqGS: FFIV - news) . (FFIV) $96.19 -1.30%
Citrix Systems Inc (NasdaqGS: CTXS - news) . (CTXS) $65.30 -1.28%