AkGulian.com

Home of News

Stocks Drop Thanks to Holiday Shoppers

On Wednesday, stocks fell for the third consecutive day of trading thanks in part to retail stocks falling after a report was released showing a drop off in holiday shopping from last year. Trading following the Christmas break was light, with the volume well below the daily average for the year.

The volume was 2012’s lightest of the year as many of the senior traders continued their vacations in the shortened holiday week. Major markets in Europe were closed on Wednesday.

Many investors announced their concerns about the budget discussion taking place in the U.S. and the possibility of increases in taxes keeping shoppers from spending their money during the holiday period. This suggests that the market will struggle until the fiscal cliff issue is resolved in Washington.

A number of the strongest performers of 2012 advanced on the day, a sign that managers might be solidifying their portfolios before presenting their results to their clients. On Wednesday, Bank of America, which has doubled during 2012, was up 2.6% to end the day at $11.54.

Sales related to the holiday season were up 0.7% during the period between October 28 and December 24. However, last year during that same period, sales increased 2%.

Due to the fiscal cliff on everyone’s mind, it was hard for many people to spend money shopping and now it is that much harder to convince investors of a reason to buy before the year ends, said one analyst.

President Obama was scheduled to arrive early on Thursday in Washington to start another round of negotiations with Republicans to stave off the automatic spending cuts in the government and the increase in taxes that will take place on January 1.

Amazon.com dropped 3.9% on the day, Abercrombie & Fitch was down 3.5% and Gap, Limited Brands and Ralph Lauren were all ranked amongst the biggest decliners in the S&P 500.

Leave a Reply

Your email address will not be published. Required fields are marked *