Sunday, April 20, 2014
YOLO COUNTY NEWS
99 CENTS

Fearing ‘cliff,’ investors finish brutal week

NEW YORK (AP) — Wall Street is peering over the “fiscal cliff” and feeling vertigo.

The stock market finished one of the worst weeks of the year Friday, pushing Washington to work out a deal to avoid the tax increases and government spending cuts set to take effect Jan. 1.

Remarks by re-elected President Barack Obama and House Speaker John Boehner on the looming deadline didn’t do much to cheer the market. Stocks finished barely higher for the day.

Chris Bertelsen, the chief investment officer at Global Financial Private Capital of Sarasota, Fla., said he expects Congress and Obama to reach a compromise to avoid the fiscal cliff.

“But it could well be the conventional U.S. political way of doing it — the last minute type of stuff — in which case the markets will be haunted by it until the point it happens,” he said.

For the week, the Dow Jones industrial average fell 277 points, or 2.1 percent. The Dow has fallen 795 points since hitting its closing high for the year, 13,610 on Oct. 5.

The S&P fell 2.3 percent during the week, its worst weekly decline since June 1, when investor concern about the debt crisis in Europe was rising.

Stocks began their slide Wednesday in the biggest sell-off of the year after voters returned Obama, a Democratic Senate and a Republican House to power. Investors immediately turned to worrying about the cliff.

If the tax increases and spending cuts take full effect, the U.S. will likely fall back into recession, the Congressional Budget Office said Thursday.

Boehner said Friday that he remains unwilling to raise tax rates on upper-income earners. But he left open the possibility of balancing spending cuts with revenue increases that come from some revisions to the tax code.

Stocks managed a small rally. The Dow was up about 30 points when Boehner started talking and about 80 points shortly after.

Then Obama said he would not accept any approach to federal deficit reduction that doesn’t ask the wealthy to pay more in taxes. A spokesman later said Obama would veto legislation extending tax cuts for families making $250,000 or more.

The Dow began sliding just before Obama spoke, at 1 p.m., and had lost its gain for the day by 1:30.

As they head into talks with Obama next week on the fiscal cliff, congressional leaders no doubt remember what can happen on Wall Street when investors are worried and watching Washington’s every move.

In September 2008, at the depths of the financial crisis, the House defeated a $700 billion emergency rescue of the nation’s financial system, sending the Dow plunging 777 points.

The Dow also slid for eight straight days in the summer of 2011 as politicians squabbled over a deal to raise the nation’s federal borrowing limit before eventually reaching an accord Aug. 1.

The index slipped as much as 634 points between July 27 as the political bickering intensified and Aug. 5, when S&P downgraded the national credit rating, citing the weakening of U.S. political institutions as a reason for the cut.

On Friday, stocks pared losses as investors took encouragement about the economy from a report by the University of Michigan showing that consumer confidence rose more than expected in November.

The Dow finished up 4.07 points at 12,815.39. The S&P advanced 2.34 points to 1,379.85, and the Nasdaq composite gained 9.29 points to 2,904.87.

Stocks are well below the highs of this year. The S&P is down 5.5 percent from its peak of 1,465 in September, when the Federal Reserve announced a third round of a bond-buying program intended to hold down borrowing costs.

The dimming outlook for Europe also weighed on markets this week. The European Commission, the executive arm of the European Union, cut its forecast for economic growth in the region Wednesday.

The yield on the 10-year Treasury note was little changed at 1.62 percent compared with 1.61 percent late Thursday. The yield on the benchmark government security has tumbled from as much as 1.84 percent Sept. 17, as investor aversion to risk has grown. Treasury yields fall as investor demand pushes up prices.

————

By Steve Rothwell, AP business writer

The Associated Press

LEAVE A COMMENT

Discussion | No comments

The Davis Enterprise does not necessarily condone the comments here, nor does it review every post. Read our full policy

  • Recent Posts

  • Enter your email address to subscribe to this newspaper and receive notifications of new articles by email.

  • .

    News

    Hub of activity: DHS newspaper keeps evolving

    By Zoe Juanitas | From Page: A1 | Gallery

     
    A springtime ritual

    By Wayne Tilcock | From Page: A1 | Gallery

    Tom Adams seeks Davis school board seat

    By Jeff Hudson | From Page: A1

     
     
    Holy fire ceremony draws thousands in Jerusalem

    By The Associated Press | From Page: A2 | Gallery

    Tour renovated YCCC facility Thursday

    By Enterprise staff | From Page: A3

     
    Tour Davis Waldorf School on Wednesday

    By Enterprise staff | From Page: A3

    The fifth annual Tour de Cluck is soon to be hatched

    By Special to The Enterprise | From Page: A3 | Gallery

     
    Ortiz lawn signs available

    By Enterprise staff | From Page: A3

    Sign up soon for spring cooking classes

    By Enterprise staff | From Page: A3

     
    Robb Davis team to rally on Saturday

    By Enterprise staff | From Page: A3

    Steadfast in their support

    By Lauren Keene | From Page: A4, 11 Comments | Gallery

     
    Yolo Hospice offers free grief workshops

    By Enterprise staff | From Page: A4

    Sign up for Camp Kesem caterpillar crawl

    By Enterprise staff | From Page: A4

     
    Quilters gear up for annual show

    By Sebastian Onate | From Page: A4

    League hosts a series of candidate forums

    By Enterprise staff | From Page: A5

     
    KDVS launches fund drive on Monday

    By Jeff Hudson | From Page: A5

    Calling all Scrabble fans

    By Enterprise staff | From Page: A5, 1 Comment | Gallery

     
    Hub webpage is seeing traffic increasing

    By Zoe Juanitas | From Page: A8

    Learn Chinese crafts at I-House

    By Sebastian Onate | From Page: A16

     
    Preschool open house set at Davis Waldorf

    By Enterprise staff | From Page: A16

    Birch Lane celebrates its 50th anniversary

    By Enterprise staff | From Page: A16

     
    Hotel/conference center info meeting set

    By Enterprise staff | From Page: A16

    Lescroart welcomes all to book-launch party

    By Special to The Enterprise | From Page: A16 | Gallery

     
    DEVO set to serve up 14th annual Winkler Dinner

    By Enterprise staff | From Page: A16 | Gallery

    .

    Forum

    Take ownership of your health

    By Special to The Enterprise | From Page: B5

     
    Not thrilled with lack of symmetry

    By Special to The Enterprise | From Page: A7

    Reliving the agony and ecstasy of spring

    By Marion Franck | From Page: A7

     
    Keep your baby safe

    By Special to The Enterprise | From Page: A7

     
    Road diet? No, city diet!

    By Letters to the Editor | From Page: A12, 5 Comments

    We’re reveling in our equality

    By Letters to the Editor | From Page: A12, 1 Comment

     
    Vote no; it’s fiscally responsible

    By Letters to the Editor | From Page: A12, 3 Comments

    Rick McKee cartoon

    By Debbie Davis | From Page: A12

     
    Core values on campus

    By Our View | From Page: A12, 3 Comments

     
    Bill is an affront to UC Davis ag biotech and local farmers

    By Special to The Enterprise | From Page: A13, 3 Comments

    Don’t want to sit in Fix 50 traffic? Consider alternatives

    By Special to The Enterprise | From Page: A13, 1 Comment

     
    .

    Sports

    UCD softball shut out by Santa Barbara

    By Thomas Oide | From Page: B1 | Gallery

     
    Aggie men shoot 9-under, lead own tourney

    By Bruce Gallaudet | From Page: B1 | Gallery

    Stars shine in Woody Wilson Classic

    By Evan Ream | From Page: B1, 1 Comment | Gallery

     
    Devils burn up the track

    By Enterprise staff | From Page: B1

     
    UCD roundup: Aggie baseball swept away by Highlanders

    By Enterprise staff | From Page: B2

    A’s score 3 in ninth, rally past Astros 4-3

    By The Associated Press | From Page: B6

     
    .

    Features

    .

    Arts

    .

    Business

    PG&E pays taxes, fees to county, cities

    By Enterprise staff | From Page: A9, 1 Comment

     
    Will Davis get an Old Soul?

    By Wendy Weitzel | From Page: A9

    Pediatricians, nurse practitioner hired at Woodland Healthcare

    By Enterprise staff | From Page: A9 | Gallery

     
    Asian stocks mostly higher after mixed U.S. earnings

    By The Associated Press | From Page: A9

    Yolo Federal Credit Union gets WISH funds

    By Enterprise staff | From Page: A9

     
    Davis Roots will showcase its graduating startups

    By Enterprise staff | From Page: A14

    University Honda wins another President’s Award

    By Enterprise staff | From Page: A14 | Gallery

     
    Dutch Bros. raises $19,000 for girl with leukemia

    By Enterprise staff | From Page: A14 | Gallery

    .

    Obituaries

    .

    Comics

    Comics: Sunday, April 20, 2014

    By Creator | From Page: B8