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Stock Market Update for 12/20/2012

December 20, 2012

Stocks Seeing Modest Weakness In Early Trading

After coming under pressure over the course of the previous session, stocks are seeing some further downside in early trading on Thursday. The major averages have dipped into negative territory, although selling pressure remains subdued.

The major averages are currently posting modest losses, near their lows for the young session. The Dow is down 16.65 points or 0.1 percent at 13,235.32, the Nasdaq is down 8.70 points or 0.3 percent at 3,035.66 and the S&P 500 is down 1.63 points or 0.1 percent at 1,434.18.

stock market updateThe modest weakness on Wall Street comes as traders continue to keep a close eye on developments in Washington, with uncertainty about the fiscal cliff creeping back into the markets following recent comments by President Barack Obama and House Speaker John Boehner.

Boehner has indicated that he will bring his “Plan B” legislation to the floor of the House for a vote despite a veto threat from the White House.

The “Plan B” legislation would extend the Bush-era tax cuts for people making up to $1 million, but Democrats claim it would raise taxes on millions of working families.

Boehner has argued that the president would be responsible for the largest tax increase in American history if he can’t persuade Senate Democrats to approve the legislation.

As a result of the focus on the budget negotiations, traders have largely shrugged off the latest batch of U.S. economic data, including a report from the Commerce Department showing stronger than expected third quarter GDP growth.

The Commerce Department’s final estimate showed that GDP increased at an annual rate of 3.1 percent in the third quarter compared to the previous estimate of 2.7 percent growth. Economists had expected a more modest upward revision to 2.8 percent.

A separate report from the Labor Department said initial jobless claims moved back to the upside in the week ended December 15th after unexpectedly falling to a two-month low in the previous week

Gold stocks have shown a notable move to the downside in early trading, dragging the NYSE Arca Gold Bugs Index down by 1.1 percent. The weakness among gold stocks comes amid a sharp drop by the price of the precious metal, with gold for February delivery falling $18.30 to $1,649.40 an ounce.

Semiconductor and networking stocks are also seeing some early weakness, while most of the major sectors are showing only modest moves.

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