Dec. 14, 2012 at 9:50 AM ET
Wall Street opened flat at the open Friday as investors digested the latest round of economic data, while concerns about a lack of progress by politicians in ongoing fiscal negotiations remained at the forefront.
The Dow Jones industrial average was up three points at 13,174 shortly after the opening bell Friday.
The Standard & Poor's 500 index edged down two points to 1,417 and the Nasdaq composite lost 12 points to 2,979.
Adobe, which makes Photoshop photo-editing software, jumped 7 percent after the company reported earnings that beat Wall Street's expectations. Analysts are optimistic about the potential of the company's new subscription service to increase revenue.
Best Buy dropped 12 percent after the struggling electronics retailer and its former chairman agreed to give the executive more time to assemble investors to make a bid for the company.
Economic data out of China showed that manufacturing in the world's second-largest economy grew at its fastest pace in 14 months in December. That indicated China's economy was on the mend, encouraging news for its key trading partners such as the United States.
However, in Europe, the euro zone's manufacturing and services sectors showed only small signs of improvement and remained in contraction territory.
"If we assume we're going to have a continuation of a shallow recession in the euro zone, the global economy can actually increase in terms of GDP with a pick up in the pace of the Chinese economy," said Art Hogan, managing director of Lazard Capital Markets in New York.
"The bad news is, in large part, we've seen the market ignore relatively good news in the economic data stream as we focus on the fiscal cliff."
President Barack Obama and House of Representatives Speaker John Boehner held a "frank" meeting Thursday to try to break an impasse in negotiations over the "fiscal cliff," tax hikes and spending cuts set to kick in early in 2013.
Frustration has mounted over the lack of progress in the discussions, with market participants' worries reflected in a 0.6 percent drop in the S&P 500 on Thursday. Investors are concerned that going over the cliff could tip the economy back into recession. While a deal is expected to be reached eventually, a drawn-out debate - like the one seen over 2011's debt ceiling - can erode confidence.
"I think the market is convinced, due to the fact that we haven't seen much of a pullback, that some (fiscal) compromise will happen before the end of the year," said Hogan.
Worries over the outcome of the talks ended the S&P 500's six-day winning streak on Thursday, but the index has performed well over the past month. On Wednesday, the S&P hit its highest intraday level since late October.
The Associated Press and Reuters contributed to this report.