Stocks on Wall Street opened little changed on Thursday after data showed first time claims for jobless benefits fell sharply last week, but investors were cautious about making aggressive bets in the midst of ongoing “fiscal cliff” negotiations.
The three main stock indexes — the Standard & Poor’s 500, the Dow Jones industrial average and the Nasdaq composite index — were all flat in morning trading.
European shares were slightly lower by afternoon. Finance ministers in the European Union reached a deal to make the European Central Bank the bloc’s top banking supervisor. The move could boost confidence in leaders’ ability to tackle the region’s sovereign debt crisis.
Still, global equities gains were likely to be constrained as the set of tax increases and spending cuts that are set to come into effect in the United States in the new year remained at the forefront of investors’ minds. Negotiators on Wednesday warned the showdown over reaching a deal on the so-called fiscal cliff could drag on past Christmas.
The Federal Reserve on Wednesday announced a fresh bout of stimulus for the American economy, but markets focused on comments from Ben S. Bernanke, the Fed chairman, who reiterated that monetary policy would not be enough to offset going over the fiscal cliff.
Investors were worried that doing so could send the economy back into recession, though most expect a deal will be struck eventually.
“Obviously, people still have their eyes on the ‘fiscal cliff’ negotiations,” said Peter Jankovskis, co-chief investment officer at OakBrook Investments LLC in Lisle, Ill. “It’s just a wait-and-see mode.”
Initial claims for state unemployment benefits dropped 29,000 to a seasonally adjusted 343,000, pointing to healing in the labor market.
Separate reports showed producer prices fell more than expected in November, while retail sales rebounded.
Shares of Best Buy surged more than 15 percent after a report that the company’s founder is expected to make a fully financed offer to buy the consumer electronics retailer by the end of the week.
Sprint Nextel offered $2.1 billion to buy the rest of Clearwire Corp to get full ownership of its wireless spectrum. Shares of Clearwire jumped 11.6 percent, while Sprint slipped 0.7 percent.
CVS Caremark gained 4.9 percent after it said it expects higher earnings next year.
Stocks in Wait-and-See Mode
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Stocks in Wait-and-See Mode
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Stocks in Wait-and-See Mode
