Thursday, November 8, 2012

Sank on Europe and fiscal-cliff fears

Stocks sank across the board, with DJIA performing its worst day of the year, as anxiety about the “fiscal cliff” and Europe’s economic troubles hammered sentiment. With the election over, Wall Street turned to pondering the more than $600 billion in tax hikes and spending cuts scheduled to take effect in January should Congress fail to reach a deficit-cutting deal. Also, the European Commission said the euro-zone economy will expand only 0.1% in 2013, down from a May projection of 1%. In Greece the coalition government of Prime Minister Antonis Samaras is looking for parliamentary approval of austerity measures needed for the nation to get its next round of rescue funds. Tech stocks followed the broad market to close deep in the red with Apple sliding 3.83% after the chairman of Chinese electronics manufacturer Hon Hai Precision Industry Co. said the company is having difficulties keeping up with demand for Apple’s iPhone 5 because it can’t meet Apple’s quality standards. Significant losses also came from Hewlett-Packard, Dell, Groupon, Oracle and Microsoft. In the evening trade Qualcomm surged 8% on strong sales of chips used in mobile phones and other wireless devices. Activision Blizzard advanced 2% after the co.’s third-quarter sales topped estimates, bolstered by new releases from its “World of Warcraft” and “Diablo” franchises. Implied volatility inched higher on moderate trading volumes.