US stocks finished slightly lower in a quiet session yesterday as the back-and-forth wrangling over the “fiscal cliff” gave investors little reason to act.
Trading volume was light as legislators continue to negotiate a deal to avoid a $600bn (£372bn) package of tax hikes and federal spending cuts that would begin 1 January and could push the economy into recession.
Just 5.86bn shares changed hands on the New York Stock Exchange, the Nasdaq and the NYSE MKT, below the year’s daily average of 6.48bn shares.
A key measure of investor anxiety has remained muted. The CBOE Volatility Index or VIX, a gauge of market anxiety, was at 17.12, up 2.9 per cent. It has not traded above 20 since July.
Optimism for progress was dented after remarks by President Barack Obama, who rejected a Republican proposal to resolve the crisis as “out of balance” and said any deal must include a rise in income tax rates on the wealthiest Americans.
Expectations of higher taxes on dividends beginning in 2013 have pushed many companies to pay special dividends this year or advance their next payback to investors. Coach became the latest to move up the date of its next dividend payment, and the news lifted shares of the upscale leather-goods maker earlier in the session. It closed down 1.2 per cent at $57.52.
The Dow Jones industrial average fell 13.82 points, or 0.11 per cent, to 12,951.78 at the close.
The Standard & Poor’s 500 Index dipped 2.41 points, or 0.17 per cent, to 1,407.05.
The Nasdaq Composite Index shed 5.51 points, or 0.18 per cent, to close at 2,996.69.