US stocks made small gains in early Wednesday trading but slipped into the red by midday as investors continued to await further developments in the fiscal cliff negotiations in Washington.
"We're starting to lead with an assumption of some type of deal being done since both sides erased their lines in the sand," Art Hogan, market strategist at Lazard Capital Markets, told MarketWatch
The Dow Jones Industrial Average
(INDEXDJX:.DJI) was down 0.20% to 13,323.70 points as of 12:06 p.m. EST.
(NYSE:AA) was the biggest loser on the day, falling 2.92% to $8.65 after Moody’s Investor Service warned that it may lower the company’s credit ratings from its current “Baa3" level because of an almost 22% plunge in aluminum prices over the last year. A downgrade would put Moody’s credit in “junk bond” territory, which could mean a sharp increase in future borrowing costs.
"Europe's recession and sovereign-debt crisis, sluggish performance in the US economy, and slower growth in China are expected to continue to adversely impact the aluminum industry," Moody's said, according to Reuters
. "We do not see a material, sustainable improvement in aluminum prices over the next several quarters and expect Alcoa's earnings performance and debt protection metrics to remain challenged."
(NYSE:GE) also dropped2.63% to $21.12 after UBS downgraded the company and struck it company off its “key call” list, citing strong possibilities that GE’s near-term earnings will be poor because of the uncertain global macro environment.
(NYSE:AXP) similarly dipped 1.09% to $57.19 on a downgrade to Equal Weight from Overweight by Evercore. Credit companies Capital One Financial
(NYSE:COF) (-0.38%), Discover Financial
(NYSE:DFS) (-1.09%), Mastercard
(NYSE:MA) (-0.23%), and Visa
(NYSE:V) (-0.59%) were all down on the day as well.
(NYSE:UTX) inched up 1.02% to $83.07. The company, which receives many government contracts, would have been badly hurt by automatic cuts to government spending, so any fiscal cliff optimism is always welcomed by investors.
(NYSE:CAT), looking to climb for a ninth session in a row, was up 0.90% to $91.59.
No positions in stocks mentioned.
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.
Copyright 2011 Minyanville Media, Inc. All Rights Reserved.