Wall Street steady on "cliff" apprehension, Apple drops

Stocks were little changed on Friday, with the Nasdaq weighed by a 3-percent drop in shares of tech giant Apple, amid investor worries about a lack of progress by politicians in ongoing fiscal negotiations.

Apple was down 2.8 percent at $515.11 as UBS cut its price target to $700 from $780. The stock has tumbled in recent months for a variety of reasons, including investors locking in profits ahead of scheduled capital-gains increases for next year.

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.

"The uncertainty that (the fiscal talks) is creating is basically holding the markets hostage in the short term," said Andres Garcia-Amaya, global market strategist at J.P. Morgan Funds, in New York.

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 ultimately be reached, a drawn-out debate - like the one seen over 2011's debt ceiling - can erode confidence.

Still, expectations of an eventual agreement have helped the S&P 500 bounce back over the last month, and on Wednesday, the index hit its highest intraday level since late October. For the year, the S&P has advanced more than 12 percent.

"For the end of this year, I wouldn't expect a lot of big decisions by investors," Garcia-Amaya said. "It's been a fairly good year for equities and for that reason a lot of people don't want to be a hero going into the end of the year."

The Dow Jones industrial average edged up 11.05 points, or 0.08 percent, at 13,181.77. The Standard & Poor's 500 Index slipped 2.49 points, or 0.18 percent, to 1,416.96. The Nasdaq Composite Index lost 12.62 points, or 0.42 percent, to 2,979.54.

Best Buy Co Inc slid more than 15 percent to $11.90 after it agreed to extend the deadline for the company's founder to make bid.

Consumer prices fell in November for the first time in six months, indicating U.S. inflation pressures were muted. A separate report showed manufacturing grew at its swiftest pace in eight months in December.

Meanwhile, data out of China was encouraging for its key trading partners, including the U.S., and for the prospects for global growth. It showed manufacturing in the world's second-largest economy grew at its fastest pace in 14 months in December.

(Editing by Bernadette Baum)