In the past few weeks, every day has brought with it a fresh sentiment about the broader direction of the economy. Today that sentiment was decidedly negative, as House Speaker Boehner cancelled a vote that could have raised taxes on millionaires and bridged the political divide over the fiscal cliff. Instead, that divide seemed to grow, causing greater unease over a prompt resolution to the issue; The Dow Jones Industrial Average (^DJI +0.10%) was hit as a result, falling 120 points, or 0.91%, to close at 13,190.
Gaining less than 0.2%, McDonald's (MCD 0.13%) was one of only two stocks in the Dow to rise today. Given the (incrementally) increased possibility of a recession, perhaps markets are bidding up shares in anticipation of a dramatic and sudden nationwide shift to the dollar menu. Also, yet again we saw Bank of America (BAC +0.47%) shares exhibit greater volatility than the wider market, losing 2% of their value as financials suffered.
Intel (INTC 3.75%) shaved 1.3% off its market value. Despite its 4.3% dividend and sub-10 P/E ratio, investors didn't find shares in the chipmaker to be a compelling buy. Nor have they for most of the year: Intel's 11% decline in 2012 means the stock has underperformed the Dow by about 20% thus far. One has to consider whether Wall Street is overreacting to the fiscal cliff issue and punishing quality companies like Intel as a result.
Another chip maker, Advanced Micro Devices (AMD 0.17%), actually performed well in Friday trading. It's down more than 50% for the year as its profits and earnings have fallen sharply. Still, some investors realized the stock could be on sale today, and the stock jumped nearly 8% as a result.
This evening, at a 5:30 p.m. ET press conference, President Obama said about the fiscal cliff that "nobody can get 100% of what they want" and that he was "ready and willing" to reach a deal. He emphasized he thought an agreement could still be reached within the next 10 days, before the Jan. 1 deadline, encouraging Americans to relax and enjoy some eggnog.
