Stock Market Story: Nov. 27
NEW YORK (TheStreet) -- The major U.S. stock averages opened mildly lower Tuesday as worries about talks over the so-called fiscal cliff overshadowed some decent durable goods and home-price numbers.
With the worries over U.S. budgetary talks persisting, U.S. investor sentiment didn't get much of a boost from the rally in overseas markets on positive aid news for Greece.
The Dow Jones Industrial Average was falling more than 22.5 points, or 0.18%, at 12,944. The S&P 500 was falling more than 1.5 points, or 0.11%, at 1404. The Nasdaq was down more than 2 points, or 0.08%, at 2974.
"An agreement to avert the fiscal cliff before year-end remains our central assumption, though it continues to look like a fairly close call given the political obstacles to a deal," said Goldman Sachs economists in a morning note. "If a deal is reached, we would expect a tax increase of a magnitude similar to the upper income tax cuts, though the composition might differ. Entitlement reforms also seem likely to be part of a package, particularly related to health programs. 'Downpayments' in both areas seem likely, with additional deficit reduction to be enacted in 2013 as part of a two-stage process."
The working deadline for an agreement, according to the Goldman Sachs economists, appears to be Dec. 21.
"While talks are ongoing, we would not expect serious negotiations to begin for another couple of weeks. In the interim, headlines out of Washington are likely to be mixed, but we would expect more negative than positive news until at least mid-December," the economists noted.
The Census Bureau reported Tuesday that durable goods orders were unchanged in October after a prior downwardly revised gain of 9.2% in September. Excluding the transportation component, orders rose 1.5%, compared with a downwardly revised increase of 1.7% the previous month.
Economists, on average, had expected orders to fall 0.6% in October and decline 0.5%, excluding transportation.