We're in the midst of a fiscal cliff stock market abyss. After being down around 1% for most of the day, a late-session rally has the Dow Jones Industrial Average (DJINDICES:^DJI) down just 0.47% today and the S&P 500 (SNPINDEX:^GSPC) has fallen 0.41%. The latest fiscal cliff news is that President Obama is planning to present a scaled-down plan to Congress, and the House plans to be in session on Dec. 30, progress if we can call it that. But that's not the only news that may impact the economy.
The positive data for the day included a rise in new-home sales to an annual rate of 377,000, the highest level in two-and-a-half years. Jobless claims also fell 12,000 to a seasonally adjusted 350,000, and the one-month average fell by 11,250 to 356,750, the lowest level since March 2008. The one negative was a continued drop in consumer confidence. The Conference Board's Consumer Confidence Index fell to 65.1, down from 71.5 last month.
All 30 of the Dow's components have traded lower for most of today, and banking stocks are leading the plunge. Bank of America (NYSE:BAC) is down 2%, while JPMorgan Chase (NYSE:JPM) has fallen 2.1% in late trading. Alcoa (NYSE:AA) has fallen 2.2% and is the biggest loser on the Dow. These three stocks have become the big movers day after day as the fiscal cliff approaches because they have the most at stake. A recession could be devastating for the banking industry right now and would also slow down the construction that Alcoa relies on for demand.
Uncertainty has its grip on the markets, and until a fiscal cliff deal gets done, the market will gyrate based on the news flow out of Washington, D.C. For long-term investors, this provides a great opportunity to get stocks on the cheap.