MarketView for December 4

Summary

 The major equity indexes ended the day on Tuesday slightly lower in a quiet as the back-and-forth wrangling over the "fiscal cliff" gave many on the Street little reason to move off the sidelines. Trading volume was light as legislators continue to negotiate a deal to avoid a $600 billion package of tax hikes and federal spending cuts that would begin January 1 and could push the economy into recession.

A key measure of investor anxiety has remained muted. The CBOE Volatility Index or VIX, a gauge of market anxiety, was at 17.12, up 2.9 percent. It has not traded above 20 since July.

Optimism for progress was dented after remarks by President Barack Obama, who rejected a Republican proposal to resolve the crisis as "out of balance" and said any deal must include a rise in income tax rates on the wealthiest Americans. The market has been sensitive to rhetoric from Washington, as a failure to reach an agreement could send the U.S. economy back into recession. Still, many expect a resolution to be found, which could extend the S&P 500's rally of 12 percent so far this year.

Differences within the Republican Party came to the fore on Tuesday as one senator opposed to raising taxes lashed out at Republican House Speaker John Boehner for proposing to increase revenue by closing some tax loopholes. Congressional Republicans recently proposed steep spending cuts to bring down the budget deficit, but gave no ground on Obama's call to raise tax rates on the rich. The proposal was quickly dismissed by the White House.

Expectations of higher taxes on dividends beginning in 2013 have pushed many companies to pay special dividends this year or advance their next payback to investors. Coach became the latest to move up the date of its next dividend payment, and the news lifted shares of the upscale leather-goods maker earlier in the session. By the close, though, Coach was down 1.2 percent at $57.52.

One of the S&P 500's top sectors for the day was health care, considered a defensive group.

Netflix was the S&P 500's top percentage gainer, advancing 14 percent to $86.65 after Walt Disney agreed to give the company exclusive TV distribution rights to its movies, starting in 2016.

Intel rose 2.2 percent to $19.97 after the top chipmaker sold $6 billion in bonds to fund stock buybacks and other business activities.

Darden Restaurants fell 9.6 percent to $47.40 as the S&P 500's worst performer after the company warned that its latest quarter would miss expectations after unsuccessful promotions led to a decline in sales at its Olive Garden, Red Lobster and Long Horn Steakhouse chains.

In contrast, Big Lots was up 11.5 percent to $31.27 after the close-out retailer posted a smaller-than-expected loss and boosted its full-year adjusted earnings forecast.

MetroPCS Communications ended the day down 7.5 percent to close at $9.96 after Sprint Nextel appeared unlikely to make a counter-offer for the wireless service provider. After the closing bell, Pandora Media drpped 23 percent after the company reported its third-quarter results.

Just 5.86 billion shares changed hands on the three major equity exchanges, a number that was well below the year's daily average of 6.48 billion shares.  In addition, about half of the stocks traded on the Big Board closed lower, while half of the Nasdaq-listed shares ended the day in negative territory.