The stock market eased down a notch in mid-Monday trading, with investors continuing to worry about uncertainty in Europe, where eurozone finance ministers were meeting once again to try to agree on an aid tranche for Greece, and here in the US, where lawmakers started negotiations on a budget deal to avert the fiscal cliff.
David Kelly, chief global strategist at JPMorgan Funds, said in a research note
that the uncertainty over the fiscal cliff was “restraining gains in economic activity, stock prices, and interest rates,” but he added that “once the fiscal fog clears, all three could move higher, suggesting that this probably remains a time to be a little overweight risk assets.”
The Dow Jones Industrial Average
(INDEXDJX:.DJI) was down 0.64% to 12,925.98 points as of 12:02 p.m. EST.
All but one Dow component were in the red in intraday trading. Financials were hit hard, with JPMorgan
(NYSE:JPM) sliding 1.84% to $40.33 and Bank of America
(NYSE:BAC) falling 1.11% to $9.79. Earlier, Guggenheim Securities analyst Marty Mosby said in a note that Bank of America "is one of the leading candidates for a significant correction if the pressure on the US economy from the Fiscal Cliffs begins to build.”
Though Mosby has a Buy rating and $13 target on the bank, he said nonetheless that “BAC could trade below $8 over the next three months if it becomes apparent that the US economy is about to be pushed over several of the upcoming Fiscal Cliffs.”
(NYSE:AXP) was also down 0.94% to $55.98. The bellwether Financial Select Sector SPDR ETF (
NYSEARCA:XLF), which tracks all financial stocks in the S&P 500, was down 0.79% to $15.72.
(NYSE:UNH) also declined 1.65% to $53.03 after the insurer provided a 2013 profit forecast that fell below expectations. UnitedHealth said that earnings in 2013 will come in at $5.25 to $5.50 per share, when analysts had expected $5.58 per share.
After a downgrade to Neutral from Buy at Lazard Capital, shares of McDonald’s
(NYSE:MCD) retreated 1.14% to $86.06. Lazard analyst Matthew DiFrisco said in a research note that the drop in October same store sales for the fast food giant “implies MCD is losing share domestically while the informal eating out category demand is contracting in several key international markets.”
(NASDAQ:MSFT) was also down 1.61% to $27.25.
No positions in stocks mentioned.
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