U.S. stocks drop sharply on ‘cliff’ concerns

U.S. stocks drop sharply on ‘cliff’ concerns
Israeli air strike kills Hamas leader; price of crude spikes 1.1%
NEW YORK (MarketWatch) — U.S. stock indexes fell to multi-month lows Wednesday on worries about the U.S. “fiscal cliff” and after an Israeli strike in the Gaza Strip increased Wall Street’s anxiety, offsetting gains in the tech sector.
The budget negotiations to avert more than $600 billion in automatic spending cuts and tax hikes from starting in January is “a global economic event, and the eye of the storm is Washington,” said Jim Russell, chief equity strategist for U.S. Bank Wealth Management.

“There is increasing activity between Israel and several other Middle East countries, which is taking oil higher and making markets more jittery, and adding to the markets’ downside volatility,” said Russell.

After rising 41 points and falling 213 points, the Dow Jones Industrial Average (DJI JIA) closed at 12,570.95, down 185.23 points, or 1.5%. The third day of declines left the index at its lowest close since late June.

Of the Dow’s 30 components, only Cisco Systems Inc. (NASDAQ:CSCO) remained in positive turf, up 4.8% after the computer-networking-equipment maker “surprised virtually every analyst ... by handily beating top- and bottom-line estimates,” Fred Dickson, chief investment strategist at Davidson Cos., wrote in email.

Also finishing at a more-than-four-month low, The S&P 500 Index (SNC:SPX) shed 19.04 points, or 1.4%, to 1,355.49, with industrials hardest hit of its 10 major sectors, all of which ended in the red.

Down more than 10% from its September closing high, putting it in correction territory, the Nasdaq Composite (NASDAQ:COMP) fell 37.08 points, 1.3%, to 2,846.81, its lowest close in five months.
For every stock that rose more than eight fell on the New York Stock Exchange, where 830 million shares traded. Composite volume cleared 4 billion.
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