Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


While you were sleeping: Hope fades for budget deal

While you were sleeping: Hope fades for budget deal

Dec 28 (BusinessDesk) – Wall Street sank as Senate Majority Leader Harry Reid warned the US appeared set to head over the so-called fiscal cliff as an agreement between Democrats and Republicans before the year-end deadline seems unlikely.

“I don’t know time-wise how it can happen now,” Reid said in the Senate. He blamed Republicans for a lack of cooperation.

Americans are worried too. Consumer confidence weakened more than anticipated in December, as the Conference Board’s index of sentiment dropped to 65.1 from a revised 71.5 reading the prior month. To be sure, consumers’ assessment of current conditions improved in December, according to the board.

“The sudden turnaround in expectations was most likely caused by uncertainty surrounding the oncoming fiscal cliff," Lynn Franco, the board's Director of Economic Indicators, said in a statement. "While consumers are quite negative about the short-term outlook, they are more upbeat than last month about current business and labour market conditions.”

In afternoon trading in New York, the Dow Jones Industrial Average shed 0.85 percent, the Standard & Poor's 500 Index dropped 1.15 percent and the Nasdaq Composite Index weakened 1.04 percent.

US Treasuries, however, benefitted as investors sought refuge from the fiscal uncertainty and the potential impact on the economy and corporate profits.

“It’s clear heels are dug in in Washington, and we seem to be moving further away from a resolution and closer to the possibility of going over the cliff,” Scott Graham, head of government bond trading at Bank of Montreal’s BMO Capital Markets unit in Chicago, one of the 21 primary dealers that trade with the Federal Reserve, told Bloomberg News.

“The fear and worry is pushing stocks lower and Treasuries higher,” Graham said.

Still, the latest data on the labour and housing market bested expectations. Purchases of new houses climbed 4.4 percent in November to a 377,000 annual pace, the highest level in more than two years, according to Commerce Department data.

Applications for jobless benefits dropped 12,000 to 350,000 in the week ended December 22, according to Labor Department figures.

“If you could take the fiscal cliff off the table, if you could get the gorilla out of [the] corner of the room, the platform for growth in 2013 is looking reasonably solid,” John Ryding, chief economist of RDQ Economics in New York, told Bloomberg News. “But how do you get the gorilla out of the room? That’s the problem.”

In Europe, the Stoxx 600 Index eked out a gain of just under 0.1 percent from the previous close. National benchmark stock indexes also moved higher in Frankfurt and Paris, while London was steady.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Auckland Port Study: Port To Ship Out – No Departure Date

Interest groups in Auckland and its waterfront chose a group of representatives to determine the future of the port. Their consensus is that the Port is going to have to move but not before a credible location is confirmed... More>>

ALSO:

Tax: GST Threshold For Online Purchases Won't Lower Before 2018

The government wants to lower the threshold on online purchases which qualify for GST from mid-2018, but says more work is needed and there will be no change without public consultation. More>>

ALSO:

North Canterbury: Government Extends Drought Classification

The government has extended a drought classification for the eastern South Island until the end of the year, meaning the area will have officially been in drought for almost two years, the longest period for such a category. More>>

ALSO:

Negotiations Fail: Christchurch Convention Centre Build To Proceed Without PCNZ

After protracted negotiations, the government has ditched the construction consortium it picked to build Christchurch's replacement convention centre, which it now anticipates delivering at least two years behind the original schedule. More>>

ALSO:

Other Centres' Convention Centres:

Ruataniwha: Greenpeace Launches Legal Challenge Against $1b Dam Plan

Greenpeace NZ is launching a legal challenge against a controversial plan to build a dam that’s set to cost close to $1 billion and will pollute a region’s rivers. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news