MarketView for December 14

Summary

The major equity indexes were down again on Friday as another slide in Apple took a toll and investors unloaded shares because of the uncertainty surrounding the "fiscal cliff" negotiations.

Apple's stock slid 3.8 percent to $509.79 after UBS cut its price target on the stock to $700 from $780. The shares have been hit hard in the last three months. A tepid reception for the iPhone 5 in China was the primary reason Apple fell on Friday.

For the Nasdaq, this marked the second losing week in a row. All three major equity indexes ended the week slightly lower. At the same time, the S&P Information Technology Index lost one percent as Apple fell and Jabil Circuit ended the day down 5.5 percent to close at $17.51 after UBS cut its price target.

Among the other Nasdaq decliners, shares of  Qualcomm closed down 4.7 percent to $59.83.

The possibility of a fiscal cliff deal not taking place until early 2013 is rising. The back-and-forth negotiations over the fiscal cliff in Washington have kept markets on hold in what would already be a quiet period for stocks.

President Barack Obama and House Speaker John Boehner held a "frank" meeting on Thursday at the White House to discuss how to avoid the tax hikes and spending cuts set to kick in early in 2013.

For the week, the Dow slipped 0.2 percent, while the S&P 500 fell 0.3 percent and the Nasdaq was down 0.2 percent.

American Express fell 1.9 percent to $56.65 and was a major blow to the performance of the Dow Jones Industrial Average.

Part of the Street’s seemingly endless concern over economic performance revolves around the fact 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 over 2011's debt ceiling - can erode confidence.

Best Buy saw its shares tumble 14.7 percent to $12.05 after the electronics retailer agreed to extend the deadline for the company's founder to make a bid. Shares jumped as much as 19 percent on Thursday after initial reports of a bid this week from founder Richard Schulze.

Among the day's economic data, consumer prices fell in November for the first time in six months, indicating inflation pressures remain muted. A separate report showed manufacturing grew at its swiftest pace in eight months in December.

Data out of China was encouraging, as Chinese manufacturing grew at its fastest pace in 14 months in December. The news was deemed as helpful for U.S. materials companies, including U.S. Steel (X.N), which rose 6.8 percent to $23.85. An S&P material sector index .GSPM rose 0.9 percent.

Approximately 5.8 billion shares changed hands on the three major equity exchanges, as compared with the year-to-date average daily closing volume of 6.52 billion shares.

Industrial Production Rises

Industrial output rose more than expected in November, posting its sharpest increase in nearly two years, as production bounced back from the disruptions of superstorm Sandy.

Industrial production expanded 1.1 percent last month after a revised 0.7 percent fall in October, the Federal Reserve said on Friday.

That was the steepest increase since December 2010. Analysts polled by Reuters had expected output to gain by 0.3 percent last month, after October's previously reported 0.4 percent drop.

The Fed said production was driven by recovery in industries hurt by the storm, which tore through the East Coast at the end of October, as well as a rise in vehicle output.

Manufacturing output expanded 1.1 percent after dropping 1 percent the previous month, though production still hovered below levels reached earlier this year.

Industrial production encompasses output from manufacturing, utilities and mining operations, including oil and natural gas production.

Production at utilities gained 1 percent in November, while mining output increased 0.8 percent.

Capacity utilization, a measure of how fully firms are using their resources, rose to 78.4 percent in November from 77.7 percent in October. Economists had expected capacity use to reach only 78.0 percent.