Stocks continued to decline on Wednesday with time running out for avoiding the fiscal cliff.
Although President Obama cut short his Christmas vacation in Hawaii to resume budget negotiations, investor anxiety continued to build on Wednesday as time for resolving the budget dispute continued to tick away. Retailers led the decline after retail sales rose only 0.7 percent from October 28 through December 24. This year’s holiday season retail sales fell far short of last year’s 2 percent increase during the same time frame. Which Way Wednesday – Cliffmas Is Upon Us
As of 2:19 EST, the Dow Jones Industrial Average declined 15 points (0.12 percent) to 13,123. The S&P 500 Index fell 0.38 percent to 1,421 (NYSEARCA:SPY). The S&P 500 chart exhibits an inverse head-and-shoulders pattern, which we have been following since November 23 (see green bar on chart) suggesting a further advance. Since that time, a larger inverse head-and-shoulders pattern has developed (indicated by the blue bar). Unfortunately, the index is on its way back down toward its 50-day moving average of 1.413. If that support level does not hold, the index will break the neckline of the inverse head-and-shoulders pattern, causing investors to head for the exits (Chart courtesy of Stockcharts.com) The Nasdaq Composite dropped 0.50 percent to 2,997 (NASDAQ:QQQ). The Russell 2000 Index declined 0.47 percent to 840 (NYSEARCA:IWM).
The “Dollar Bull” Index ETF (NYSEARCA:UUP) advanced by 1 cent (0.04 percent) to 21.77 as of 2:12 EST.
As of 2:00 EST, the S&P 500 Volatility Index – or VIX – advanced 8.52 percent to 19.36 and the VIX Short-Term Futures ETN advanced 4.82 percent to 33.50 (NYSEARCA:VXX). Money Life Show With Chuck Jaffe
The major European stock exchanges were closed on Wednesday.
As of 2:05 EST, the euro advanced 0.27 percent against the dollar, trading at $1.3219 (NYSEARCA:FXE).
On London’s ICE Futures Europe Exchange, February futures for Brent crude oil advanced by $2.09 (1.92 percent) to $110.89/bbl. (NYSEARCA:BNO, NYSEARCA:USO).
February Gold futures advanced by $1.40 (0.08 percent) to $1,660.00 per ounce (NYSEARCA:GLD).