MarketView for November 15

Summary

The equity markets were little changed on Thursday as the prospect of a drawn-out battle over impending tax and spending changes had the Street wary of getting into the water, while retailer Wal-Mart tumbled after disappointing sales.

The S&P 500 is down nearly 2 percent for the week, adding to last week's selloff and eroding more of the market's gains for the year.

What had looked like a stellar 2012 for stocks has turned into merely an average year, and as 2012 draws to a close, investors are becoming more inclined to protect the gains they have. The worry is the economy could contract again if no deal is reached in Washington to avoid the "fiscal cliff" - large, automatic budget cuts and tax hikes that begin to take effect in the New Year.

The euro zone relapsed into its second recession since 2009 in the third quarter as the region was hurt by its debt problems.

Wal-Mart fell 3.6 percent to $68.72 and was the biggest drag on the Dow as frugal consumers hurt the company's quarterly sales.

Investors will be watching Friday's meeting at the White House between President Barack Obama and Republican and Democratic leaders of Congress over deficit reduction for any sign the two sides are moving closer. The memory of last year's political impasse over raising the debt ceiling has also made analysts difficult. Moreover, even if the economy avoids an outright recession, there are fears a lengthy political dispute could sap business investment and consumer spending.

The S&P 500 fell to a 3 1/2-month closing low and was well below its 200-day moving average, which it pierced last week.

Data on Thursday showed new claims for unemployment benefits rose sharply last week, while factory activity in the mid-Atlantic region unexpectedly shrank in November as the economy felt the effects of Sandy.

A flare-up in violence in the Middle East added to market unease as Israeli warplanes bombed targets in and around Gaza city for a second day, while two rockets fired from the Gaza Strip targeted Tel Aviv.

Shares of Apple fell, sending the Nasdaq lower, falling 2.1 percent to $525.62 and down about 25 percent since September's high. Also in the tech sector, shares of Dell was lower in after-hours trading after it reported revenue that was shy of Wall Street's expectations. Dell was down 2.2 percent at $9.35.

Target bucked the trend, rising 1.7 percent to $62.44 after it reported a profit that beat expectations.

Volume was roughly 7.26 billion shares changing hands on the three major equity exchanges, topping the year-to-date average daily closing volume of around 6.5 billion.