Wall Street to dip at open as "fiscal cliff" angst lingers


Wall Street was set to slightly dip at the open on Thursday in what could be another choppy session as the progress of fiscal negotiations in Washington continues to determine the market's fate.

Apple's stock price continued to fall, pressuring Nasdaq futures lower, after slumping 6 percent on Wednesday in its biggest single-day loss in four years.

Continue Reading Below

Budget discussions continued to be a key focus for investors. President Barack Obama said there could be a quick deal to avert the "fiscal cliff" - tax hikes and spending cuts set to begin next year, possibly driving the U.S. economy back into recession - if Republican leaders agree to raise tax rates for those making more than $250,000 a year.

While Republican leaders in the House of Representatives insist that raising tax rates on the rich is a no-go, some GOP lawmakers now see it as inevitable to avoid the fiscal cliff.

"The market is going to continue to look for news out of Washington and that is going to be the main driver," said Kim Forrest, senior equity research analyst at Fort Pitt Capital Group in Pittsburgh.

Data showed the number of Americans filing new claims for unemployment benefits fell for a third straight week last week, but still remain too volatile to offer a clear signal on labor market conditions.

"Everyone was saying that claims had gone up because of Sandy, so it's comforting when you get the confirmation," said Paul Zemsky, head of asset allocation at ING Investment Management in New York.

"No additional weakness in the economy is showing up in jobless claims."

S&P 500 futures fell 4 points and were below fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures fell 16 points, and Nasdaq 100 futures dropped 9 points.

Apple Inc's rank in China's smartphone market fell to No.6 in the third quarter as it faces tougher competition from Chinese brands, research firm IDC said Thursday. Apple's 6.4 percent drop on Wednesday was its worst daily performance since mid December 2008 and dragged down the Nasdaq Composite.

Shares of Apple were down 1.7 percent at $527.51 in premarket trading.

On Wednesday, CME Group , the biggest operator of U.S. futures exchanges, joined a group of companies that were moving 2013 dividend payouts to December to shield shareholders from expected tax hikes in 2013.

Without action from Congress in coming weeks, tax cuts on capital gains and dividends will expire at the end of 2012.

Garmin shares rose 4.1 percent in premarket trading after Standard & Poor's said it will add the navigation device maker to its S&P 500 index. Garmin will replace R.R.Donnelley & Sons after the close of trading on December 11.

Several European equity benchmark indexes hit 2012 highs, boosted by hopes a U.S. budget deal will be reached before the year-end, and that the worst of Europe's debt crisis might be over.

The broad U.S. market seesawed Wednesday, with the S&P 500 dropping into negative territory before it rebounded off the 1,400 level, seen as a key technical support.

(Editing by Bernadette Baum)