Stocks: Nasdaq off 1% as D.C. deal eyed

2:32 PM, Dec 11, 2013   |    comments
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USA TODAY - Stocks are stumbling Wednesday as investors eye a federal budget deal and earnings reports, with next week's meeting of the Fed looming on the financial horizon.

In afternoon trading, the Dow Jones industrial average, S&P 500 index and Nasdaq composite are off 0.6%, 0.9% and 1.2%, respectively.

All three indexes recently topped big milestones -- the Dow and S&P 500 going over 16,000 and 1800 for the first time ever and the Nasdaq topping 4000 for the first time in 13 years. But now only the Nasdaq remains above its lofty, even-number threshold.

In Washington, budget negotiators announced a bipartisan deal to set spending levels for two years and partially replace unpopular spending cuts with other savings.

Health care stocks had some of the biggest declines.

Laboratory Corporation of America suffered a big decline -- nearly 11%, to $88.60 -- after cutting its full-year earnings forecast. Quest Diagnostics, a major competitor, also dropped.

Joy Global, a maker of mining equipment, sank after posting earnings that fell short of the forecasts of Wall Street analysts.

Food Network operator Scripps Networks Interactive jumped 7% to $80.22 after a report that the board of Discovery Communications discussed a bid for the company.

MasterCard rose 4.4%, to $797.10 after it announced a 10-for-1 stock split, raised its quarterly outlook and launched a $3.5 billion stock buyback.

"Markets have started to factor in the prospect of Fed tapering at the December meeting," said Daniel Martin of Capital Economics.

The Federal Reserve's policy-making Federal Open Market Committee is scheduled to meet Dec. 17-18 in Washington.

The central bank's $85 billion of monthly bond purchases have kept U.S. interest rates low to encourage economic recovery but also sent a flood of money into stock markets worldwide in search of higher returns.

Asian stocks were mostly down Wednesday.

Japan's Nikkei 225 index fell 0.6% to 15,515.06 and Hong Kong's Hang Seng index dropped 1.5% to 23,387.68.

On Wall Street, stocks fell modestly Tuesday as investors took a breather from a string of record highs. The Dow fell 0.3% to 15,973.13. The S&P 500 lost 0.3% to 1,802.62. The Nasdaq composite shed 0.2% to 4,060.49.

TUESDAY: Dow falls below 16,000 as stocks pull back a bit

Benchmark U.S. crude for January delivery was down 3 cents to $98.48 in electronic trading on the New York Mercantile Exchange. The contract gained $1.17 to close at $98.51 on Tuesday.

(Copyright © 2013 USA TODAY)

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