Wall Street drops on fiscal cliff worry, weak data

2012-12-03 22:45:59 GMT2012-12-04 06:45:59(Beijing Time)  Xinhua English

U.S. stocks closed lower Monday as investors' concerns about the looming"fiscal cliff" issue still pressured the market, while weak U.S. economic data added worries on the economic growth.

The Dow Jones Industrial Average lost 59.98, or 0.46 percent, to close at 12,965.60. The Standard & Poor's 500-stock Index dropped 6.72, or 0.47 percent, to 1,409.46, while the Nasdaq Composite Index retreated 8.04, or 0.27 percent, to 3,002.20.

The U.S. House Speaker John Boehner and six other House Republican leaders on Sunday unveiled a proposal, calling for 800 billion dollars in revenues through tax reforms and 600 billion dollars in health savings among other offers. Treasury Secretary Timothy Geithner also said that the Republicans would ultimately agree to raise tax rates on the rich to avert the potential economic disaster of the cliff.

Investors still lacked confidence in the solutions to avert the fiscal cliff and the mood weighed on Monday's market.

In Europe, Greece announced debt-buyback plans on Monday, in an effort to lower its increasing debt. The bond repurchase is key to the efforts of its foreign lenders to put Greece's debt back on sustainable footing, and will help the debt-ridden country receive funding to avoid bankruptcy.

On the economic front, the Institute for Supply Management reported that U.S. manufacturing unexpectedly contracted to 49.5 in November, dropping to the lowest level in nearly three years. The weaker-than-expected data added investors' concerns about the U.S. economy.

Meanwhile, construction spending climbed 1.4 percent to an annual rate of 872.1 billion dollars in October, according to the U.S. Commerce Department, as spending on homes became stronger. Analysts had expected a 0.5 percent increase.

However, data from overseas showed good sign of economic growth. The HSBC China manufacturing data rose to 50.5 in November from 49. 5 in October, the first time since October 2011.

On corporate news, the computer manufacturer Dell surged after Goldman Sachs upgraded its stocks to "buy" from "sell."

Ford gained as the U.S. automaker announced that its November auto sales gained 6.5 percent, beating expectations.

On other markets, the dollar lost ground against the euro as upbeat news from the Europe lifted the shared currency. Oil gained slightly to close below 90 dollars a barrel, while the gold edged up 5.10 dollars to settle at 1,716 dollars an ounce.

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