U.S. stock-index futures drop on concern over budget agreement

U.S. STOCK FUTURES FELL over concerns on the fiscal cliff and a lack of a budget deal before the Dec. 31 deadline.
Posted 12/28/12

ATHENS - U.S. stock futures fell, indicating the Standard & Poor’s 500 Index will drop for a fifth day, amid concern talks between President Barack Obama and Republican lawmakers may not yield a budget deal by the year-end deadline.

Bank of America Corp. and Citigroup Inc. tumbled more than 1 percent as financial shares dropped. Home Depot Inc. and Lowe’s Cos. slid at least 0.7 percent amid a looming strike by dockworkers.

S&P 500 index futures expiring in March dropped 0.5 percent to 1,403.5 at 8:41 a.m. in New York. The benchmark index has slipped 0.8 percent this week. Dow Jones Industrial Average futures lost 58 points, or 0.5 percent, to 12,945 today.

“It’s crunch time,” said Mike Lenhoff, chief strategist at Brewin Dolphin Securities Ltd. in London. “I think somebody has got to give. Otherwise things look pretty bad.”

Obama summoned Republican and Democratic leaders to a White House meeting three days before a year-end deadline to avoid $600 billion in spending cuts and tax increases, amid increasing concern that the time is too short to reach a deal.

The president, who had been negotiating one-on-one with House Speaker John Boehner, will meet today with Republicans Boehner and Senate Minority Leader Mitch McConnell, and Senate Majority Leader Harry Reid and House Minority Leader Nancy Pelosi, both Democrats. The meeting will be held at 3 p.m. Washington time.

The S&P 500 pared losses to 0.1 percent yesterday as the House of Representatives planned a session on Dec. 30. The gauge has rallied 13 percent this year, its largest annual gain since 2009.

Home sales

A report from the National Association of Realtors at 10 a.m. New York time may show that pending sales of existing houses climbed 1 percent in November from the previous month, when it increased 5.2 percent, according to the median forecast of 35 economists in a Bloomberg News survey.

Financial shares tumbled. Bank of America dropped 1 percent to $11.35, and Citigroup erased 1.1 percent to $38.83.

Home Depot fell 1 percent to $60.47 and Lowe’s declined 0.7 percent to $34.90. The home-improvement chains have the most at stake among retailers facing a dockworkers’ strike, with possible port closings cutting off shipments right before the lucrative gardening season. The International Longshoremen’s Association has vowed to walk out if a deal isn’t reached before the Dec. 29 expiration of its contract with the U.S. Maritime Alliance.

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