The News Courier in Athens, Alabama

State and Nation

November 12, 2012

Stocks rise in uneven trading; fiscal threat looms

— U.S. stocks turned positive Monday afternoon, in a day of uneven trading plagued by investors' fears about the approaching "fiscal cliff."

The Dow Jones industrial average was up 42 points at 12,857 as of 1:20 p.m. Eastern time. It had been slightly lower for most of the day before turning decisively positive around 1 p.m.

The Standard & Poor's 500 index rose five points to 1,384. The Nasdaq composite added 12 to 2,916.

Trading was light. The federal government and the U.S. bond market were closed for Veterans Day, and there were no economic reports scheduled for release.

The fiscal cliff refers to government spending cuts and tax increases that are scheduled to kick in at the beginning of the new year, unless a divided Congress and the White House can work out a compromise before then.

Some traders thought the uncertain moves were nearly inevitable because there has been no strongly positive or negative news about the economy or the possibility of a deal to avoid the fiscal cliff.

"Nothing good is going on," said Scott Freeze, president of Street One Financial in Huntingdon Valley, Pa. "Everything forward-looking remains dreary."

Last week, after voters returned a long-deadlocked divided government to Washington, the Dow dropped 434 points in two days and had one of its worst weeks of the year.

Even if lawmakers work out a compromise, as they usually do, the political fight until then is sure keep investors on edge, pitching the stock market back and forth until it's resolved. Economists say the cliff could cost the economy $800 billion and 3 million jobs and would plunge the U.S. back into recession.

President Barack Obama, a Democrat, and House Speaker John Boehner, a Republican, have spoken of compromise but appear to be taking firm stances on some issues. Obama will meet with labor representatives as well as other progressive groups Tuesday. He'll hold separate meetings with the business community Wednesday.

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