Fearing 'cliff,' investors cap off a brutal week
NEW YORK -- Wall Street is peering over the "fiscal cliff" and feeling vertigo.
The stock market finished one of the worst weeks of the year Friday, pushing Washington to work out a deal to avoid the tax increases and government spending cuts set to take effect Jan. 1.
Remarks by re-elected President Barack Obama and House Speaker John Boehner on the looming deadline didn't do much to cheer the market. Stocks finished barely higher for the day.
Chris Bertelsen, the chief investment officer at Global Financial Private Capital of Sarasota, Fla., said he expects Congress and Obama to reach a compromise to avoid the fiscal cliff.
"But it could well be the conventional U.S. political way of doing it -- the last minute type of stuff -- in which case the markets will be haunted by it until the point it happens," he said.
For the week, the Dow Jones industrial average fell 277 points, or 2.1 percent. The Dow has fallen 795 points since hitting its closing high for the year, 13,610 on Oct. 5.
The S&P fell 2.3 percent during the week, its worst weekly decline since June 1, when investor concern about the debt crisis in Europe was rising.
Stocks began their slide Wednesday in the biggest sell-off of the year after voters returned Obama, a Democratic Senate and a Republican House to power. Investors immediately turned to worrying about the cliff.
On Friday, stocks pared losses as investors took encouragement about the economy from a report by the University of Michigan showing that consumer confidence rose more than expected in November.
The Dow finished up 4.07 points at 12,815.39. The S&P advanced 2.34 points to 1,379.85, and the Nasdaq composite gained 9.29 points to 9,204.87.