US stocks slip, paring strong gains on cliff deal
NEW YORK—US stocks closed lower Thursday amid profit taking after shares rose strongly for two straight sessions driven by Congress’s long-awaited deal to avert the economy-crunching fiscal cliff.
Also weighing in later trade were indications from the Federal Reserve that some of its core policy-makers favor wrapping up its bond-buying stimulus programs this year.
The Dow Jones Industrial Index fell 21.19 points (0.16 percent) to 13,391.36.
The broad-based S&P 500 slipped 3.05 (0.21 percent) to 1,459.37, while the Nasdaq Composite lost 11.69 points, or 0.38 percent, at 3,100.57.
Stocks rose strongly on Monday and Wednesday as Congress reached a last-minute deal to avert or postpone the tax hikes and spending cuts of the fiscal cliff. But on Thursday politicians quickly launched into their next battle over the debt and deficit, promising at least one more round of policy brinksmanship in the coming weeks.
Meanwhile the minutes from the Federal Reserve’s December meeting suggested a growing bias toward some policy tightening this year: they noted that some mebers of the Fed’s policy board favored ending their open-ended asset purchase programs during 2013 and others by the end of the year.
That sent the dollar and Treasury bond yields rising.
“It appears that members might be more concerned by the size of the balance sheet than initially thought (as asset purchases were generally anticipated to continue until mid-2014),” Thomas Julien at Natixis wrote in a research note.
Retail stocks were in play Thursday. Family Dollar sank 13.0 percent after missing expectations for earnings in its fiscal first-quarter report. Rival Dollar General also lost ground, falling 1.37 percent. Fred’s, another regional chain, fell 5.2 percent on its disappointing December sales.
Other retailers, however, picked up ground: Ross Stores (+8.0 percent), TJ Maxx owner TJX (+3.3 percent) and Nordstrom (+3.1 percent).
Abbott Laboratories gained 3.8 percent a day after it finished hiving off its pharmaceutical unit AbbVie, which slipped 0.8 percent.
Ford rose nearly 2.0 percent after reporting its best December US auto sales in six years, while GM surged 2.4 percent for its also-strong December sales.
Bond prices slipped. The yield on the 10-year US Treasury rose to 1.86 percent from 1.84 percent late Wednesday, while the 30-year pushed to 3.07 percent from 3.05 percent. Bond prices and yields move inversely.
