Stocks dropped Tuesday, and again, politicians are being given the blame. Comments from Senate Majority Leader Harry Reid that lawmakers aren't making much progress toward resolving the many fiscal issues surrounding the end-of-year expiration of hundreds of billions of dollars in tax breaks appeared to spook investors, sending stocks downward in the closing hours of the trading day. By the end of the session, the Dow Jones Industrials (DJINDICES:^DJI) fell nearly 90 points, although losses for the Nasdaq and S&P were somewhat less severe on a percentage basis.
Leading the way down was Hewlett-Packard (NYSE:HPQ), which dropped 3% as the war of words escalated between HP leaders and Autonomy's former CEO, Mike Lynch, who wrote a letter to the HP board that denied allegations of deception and suggested that HP's own mismanagement was to blame for damage to Autonomy. HP responded with a call for Lynch to provide sworn testimony. Although the rhetoric is flying back and forth, any real resolution will take a lot longer to reach, and investors need to get used to big jumps and drops along the way.
American Express (NYSE:AXP) also had a significant drop of more than 2%. Despite an announcement of relatively strong transaction volume from rival Visa (NYSE:V) over the holiday weekend, card network companies across the industry were down today. If fiscal-cliff worries really do spur a spending slowdown, especially among the affluent, then AmEx might be one of the hardest hit.
Finally, UnitedHealth Group (NYSE:UNH) fell 1.75% despite saying that it expects to add between 3.5 million and 4 million new members next year. Even with expected share repurchases of as much as $3 billion, UnitedHealth can't seem to convince investors that what now appears to be the inevitable full implementation of Obamacare won't be fatal to the health insurer.
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