Dow Slides as "No Substantive Progress" Is Made on Fiscal Cliff

Positive news all around today, but again comments from Washington pull the Dow Jones Industrial Average (INDEX: ^DJI  ) down. As of 12:40 p.m. EST, the Dow is now at 13,009 -- up 24 points, or 0.19%. While the markets are again moving higher, this morning they were up as high as 75 points after investors received news of an increase in GDP for the third quarter, an increase in existing home sales, and a drop in the initial jobless claims. But after House Speaker John Boehner held a press conference and stated that "no substantive progress" has yet been made on negotiations pertaining to the fiscal cliff, the markets sold off.

So far during today's trading session, eight of the Dow's 30 components are in the red, and three of the biggest losers are all in the technology industry.

The Dow's big losers
The Dow's biggest losers thus far today have been big tech. Intel (Nasdaq: INTC  ) is leading all losers lower as it sheds 2.2% of its share price today. The company is apparently in talks with electronics maker Sharp, which needs help shoring up its balance sheet. Reportedly, Sharp is looking for roughly $240 million from Dell (Nasdaq: DELL  ) and Intel for a partial stake in the company. Lately Intel has struggled with its own operations as it missed the mobile revolution and this may not be the best time for the company to be exploring new business ventures.  

Speaking of missing the mobile revolution, Microsoft (Nasdaq: MSFT  ) is also trading lower by 1.13% today. The company's CEO, Steve Ballmer, apparently told shareholders at the annual meeting this morning that Microsoft should have got into tablets earlier.  This also comes as one of Jefferies' analysts lowered his price target on Microsoft by $3, to $31. Shares are currently trading in the low $27 range and are up a mere 4.33% year-to-date.

Lastly, shares of IBM (NYSE: IBM  ) are down 0.64% today. The company announced it will be opening a new analytics center in Columbus, Ohio. The new facility will create around 500 jobs over the next few years and nurture economic development in the area.  At this time, the only way I can see today's drop in share price related to the announcement is that investors don't like the decision to move ahead with a new facility while so much uncertainty remains with the fiscal cliff.

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  • Report this Comment On November 29, 2012, at 1:28 PM, catthepat wrote:

    Speaker Boehner has a chance to salvage his Speakership. If he does not make this deal, the GOP will go down into oblivion like the old Wig Party and it will be thanks to the Tea Baggers.

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