News Column

Markets Stumble Despite Last Week's Strong Gains

Jan. 7, 2013

U.S. stock indexes turned lower Monday following a week of strong gains prompted by a tax deal that derailed a predicted economic downturn.

The tax code agreement on Tuesday that raised taxes for individuals earning $400,000 and families earning $450,000 per year or more settled worries about the so-called "fiscal cliff," a combined $500 billion tax increase/spending cut adjustment that was would have kicked in Jan. 1 without the new tax law. It was predicted to send the U.S. economy into a second recession.

But political leaders were not through posturing and decisions on spending expected in March have the potential to rattle investors. During the weekend, Senate Minority Leader Mitch McConnell said the discussion on taxes was closed. President Barack Obama had said earlier spending cuts were dependent on further changes in the tax code, MarketWatch reported.

In afternoon trading, the Dow Jones industrial average lost 69,.93 points or 0.52 percent to 13,365.28.

The Nasdaq composite shed 10.67 points or 0.34 percent to 3,090.99.

The Standard and Poor's 500 dropped 7.71 points or 0.53 percent to 1,458.76.

The 10-year treasury note rose 1/32 to yield 1.898 percent.

Against the dollar, the euro rose to $1.3107 from Friday's $1.3069. The dollar was lower at 87.66 yen from 88.16 yen Friday.

In Tokyo, the Nikkei 225 index lost 0.83 percent or 89.10 points to 10,599.01.

In London, the FTSE 100 index lost 0.41 percent, 25.26 points, to 6,064.58.

Source: Copyright United Press International 2013

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