U.S. stocks fell on Friday, weighed down by a resumed selloff in Apple Inc. shares and little excitement over a rise in Chinese manufacturing data and stimulative efforts by the U.S. Federal Reserve earlier in the week.
The S&P 500 closed at 1413.59, down 5.86 points or 0.4 per cent. The blue-chip Dow Jones industrial average closed at 13,135.01, down 35.71 points or 0.3 per cent. In Canada, the S&P/TSX composite index closed at 12,296.72, up 7.55 points or less than 0.1 per cent.
The economic backdrop was supportive of stocks, even as Washington continued to battle over a budget agreement, increasing the tension associated with the looming “fiscal cliff” of tax increases and spending cuts in the new year.
U.S. inflation, as measured by the consumer price index, eased to a yearly rate of 1.8 per cent in November, down 0.3 per cent and below expectations – giving the Fed plenty of breathing room for its stimulative policies.
On Wednesday, the Fed announced that it would buy $45-billion (U.S.) of U.S. Treasury securities each month, staring in the New Year. And it said it would keep its rate exceptionally low as long as unemployment remained above 6.5 per cent and inflation remained near its target of 2 per cent.
Meanwhile, U.S. industrial production rose 1.1 per cent, topping expectations. And in China, HSBC’s manufacturing purchasing managers index rose to 50.9, or a 14-month high, easing concerns about the economy.
Apple Inc. fell 3.8 per cent amid concerns about demand for its iPhone 5 in China, following its launch there. As well, an analyst at UBS cut his target price on the stock to $700 from $780.
General Electric Co. was unchanged after announcing it would boost its share buyback activity by $10-billion and raised its quarterly dividend by 12 per cent.
Key commodity prices were relatively flat. Crude oil rose to $86.73 (U.S.) a barrel, up 84 cents. Gold rose to $1,697 an ounce, up 20 cents. Suncor Energy Inc. rose 1.4 per cent and Barrick Gold Corp. rose 0.2 per cent.
Bank of Nova Scotia rose 1 cent (Canadian) after its rating was lowered by one notch by Standard & Poor’s on Thursday evening, in a downgrade of six Canadian financial firms.
“We believe that the Canadian banking sector is encountering incremental pressure from headwinds facing the Canadian economy,” S&P said in its ratings announcement.