World

Thursday 31 July 2014

'Fiscal cliff' stalemate plays on market fears of US slump

Maeve Dineen

Published 28/12/2012|05:00

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President Barack Obama waves to reporters as he steps off the Marine One helicopter and walks on the South Lawn at the White House in Washington. Photo: AP

THE ISEQ Index of Irish shares was little changed yesterday on the first day of trading after the Christmas break.

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In thin trading, the food stocks were mixed. Aryzta and Glanbia were both down, but Kerry was up 45 cent, nearly 2pc. Aryzta shed over 1pc in small volumes, while Glanbia shed 2c to €8.18.

Following a strong run of late, Smurfit Kappa was down almost 2pc to close at €8.80. Paddy Power added 0.3pc to close at €62.30 – not far off its year high.

The ISEQ finished the session down marginally at 3373 points.

Meanwhile, European stocks were little changed as US jobless benefit claims dropped and home sales climbed to a two-year high, offsetting Senate Majority Leader Harry Reid's comments that a deal on the Fiscal cliff is unlikely.

The DAX Index gained 0.3pc to 7,655.88 at the close in Frankfurt after a report cited Finance Minister Wolfgang Schaeuble as saying the worst of the euro-area debt crisis is over.

The FTSE 100 Index rose less than 0.1pc to 5,954.3 at the close of trading in London, trimming an earlier increase of as much as 0.7pc.

The benchmark gauge is heading for a 6.9pc gain this year as the European Central Bank and the Federal Reserve expanded asset purchases.

In the continuing infighting over budgetary affairs, Democrat Harry Reid criticised Republicans for refusing to go along with any tax increases as part of a US budget remedy, and said the economy seemed to be heading over the 'fiscal cliff' of impending tax hikes and spending cuts.

Economists warn that the $600bn (€454bn) in higher taxes and spending cuts, set to kick in from January, could push the world's largest economy into recession, dragging other countries with it.

US stocks fell to session lows after Mr Reid's comments, while world stocks dipped into negative territory and the euro turned negative against the US dollar.

On Wall Street, the Dow Jones industrial average was down 99.38 points, or 0.7pc, at 13,015.21.

The Standard & Poor's 500 Index was off 12.03 points, at 1,407.80. The Nasdaq Composite Index was lower by 20.46 points at 2,969.69.

The dollar rose to 85.92 yen, its highest since August 2010. It was last up 0.4pc on the day at 85.91 yen, with option barriers cited at 86 yen and stop-loss buy orders above 86.10 yen.

Irish Independent

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