Business

Stocks Flat Amid Ongoing 'Cliff' Talks; GM Soars

JeeYeon Park CNBC

Dec. 19, 2012 at 11:47 AM ET

Stocks straddled the flatline Wednesday, as investors took a breather after major averages hit a two-month high in the previous session, amid ongoing "fiscal cliff" negotiations.

The Dow Jones Industrial Average toggled in and out of positive territory, after posting its second triple-digit rally in the previous session.

The S&P 500 and the Nasdaq traded narrowly mixed. The CBOE Volatility Index (VIX), widely considered the best gauge of fear in the market, traded above 16.

Among key S&P sectors, telecoms edged lower, while techs gained.

The White House said Republican House Speaker John Boehner's "Plan B" that would extend the Bush-era tax cuts for those earning up to $1 million, is not balanced and President Obama would veto the legislation, if passed. (Read More: Early Santa Rally? If Congress Doesn't Mess Up)

Adding to jitters, ratings agency Fitch warned that the U.S. could lose its triple-A status if Washington does not solve the "fiscal cliff" issue. The agency current has a negative outlook on its U.S. sovereign rating, while Standard & Poor's cut its triple-A status on the U.S. last August.

On the economic front, housing starts dropped to a seasonally adjusted annual rate of 861,000 in November, three percent lower than the month prior, according to the Commerce Department. Super storm Sandy likely slowed starts in the Northeast. Economists polled by Reuters expected permits to rise to an 875,000-unit pace last month.

Weekly mortgage applications fell to their lowest level since early November last week, snapping a five-week gain, according to the Mortgage Bankers Association.

Among earnings, Oracle advanced after the computer hardware company beat earnings forecasts and handed in current-quarter profit guidance that matched expectations. In addition, at least 10 brokerages lifted their price target on the company.

FedEx gained after the package-delivery company posted earnings that dropped less than expected. 

General Mills edged higher after the food processing company posted earnings that topped expectations and lifted its full-year profit outlook.

Accenture and Bed Bath & Beyond are among notable companies scheduled to report earnings after the closing bell.

General Motors soared after the automaker said it will buy back 200 million of its own shares from the Treasury for $27.50 a share over the next 15 months.

Knight Capital jumped after the market maker agreed to be acquired by Getco in deal valued at nearly $1.4 billion.

Facebook gained after Cantor Fitzgerald raised its price target on the social-networking giant to $33 from $28. 

General Electric declined after UBS removed the conglomerate from its "key call" list, citing likelihood of weak near-term earnings due to the uncertain macro environment. GE is the minority shareholder of NBCUniversal.

European shares rose after investors cheered a strong business confidence report from Germany and after Standard and Poor's boosted Greece's credit rating to a B-minus with a "stable" outlook.

The government is scheduled to auction $29 billion in 7-year notes with the results available shortly after 1pm ET.

—By CNBC's JeeYeon Park (Follow JeeYeon on Twitter: @JeeYeonParkCNBC)

Coming Up This Week:

WEDNESDAY: Oil inventories, 7-yr note auction; Earnings from Accenture, Bed Bath & Beyond 
THURSDAY: GDP, jobless claims, corporate profits, existing home sales, Philadelphia Fed survey, FHFA home price index, leading indicators, Fed balance sheet/money supply, UPS busiest day; Earnings froM CarMax, ConAgra, Darden Restaurants, Discover Financial, Rite Aid, Nike, RIMM, Micron
FRIDAY: Quadruple witching, personal income & outlays, Chicago Fed activity index, consumer sentiment, BLS state employment stats; Earnings from Walgreen

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