Friday, July 29, 2011

Buyers exit market before House debt plan vote


Stocks faded in the afternoon on Thursday to end mostly lower, with investors skeptical a key vote by Congress would lead to a deal to avoid a U.S. default.
The S&P 500 fell for a fourth straight day as buyers kept to the sidelines while lawmakers tried to hash out an agreement on the deficit.
A vote on a Republican-led bill to raise the debt limit was expected in the U.S. House of Representatives after the close of trading on Thursday. The Democrat-controlled Senate is crafting a competing bill, and Democratic leaders have said the House bill, if passed, will be defeated in the Senate.
"During the course of the day, it became clear that even if (Republican House Speaker John) Boehner does get the vote, when it's turned over to the Senate, the Senate is going to reject it. That seems to be the reason for the selling into strength," said Quincy Krosby, market strategist at Prudential Financial in Newark, New Jersey.
Analysts said dissension among the ranks of lawmakers has also made investors less certain that a deal can happen.
The wrangling over the U.S. deficit has boosted volatility as stocks have fallen. The S&P 500 is down 3.3 percent on the week, while the market's fear gauge, the CBOE Volatility Index (Chicago Options:^VIX - News), rose to 23.74, the highest since mid-June.
"The lack of leadership has optimism flying at a very low altitude ... It's basically leaving investors very skittish," said Steve Goldman, market strategist with Weeden & Co in Greenwich, Connecticut.
Stocks got an early lift from a dip in jobless claims and strong pending U.S. home sales data, a day after the S&P 500 posted its biggest fall in eight weeks.


Dow Jones Industrial Average

 (DJI: ^DJI )
Index Value:12,240.11
Trade Time:4:04PM EDT
Change:Down 62.44 (0.51%)
Prev Close:12,302.55
Open:12,301.72
Day's Range:12,226.83 -12,384.90
52wk Range:9,915.73 -12,928.50

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