Stocks fall for fifth day as fiscal cliff looms

Obama
President Barack Obama planned to meet with congressional leaders on Friday.

Stocks fell for a fifth day on Friday, the longest slump since September, as lawmakers prepared for talks to avoid the fiscal cliff of spending cuts and tax increases looming in January. Treasuries extended a weekly gain.

The Dow Jones industrial average was down 86.23 points, or 0.66% at 13,010.08 at 10:25 a.m. EST Friday, while the S&P 500 fell 8.78, or 0.62%, to 1,409.32, erasing its gain for December and trimming its yearly advance to 12%. Ten-year Treasury yields fell four basis points to 1.7%.

U.S. congressional leaders plan to meet with President Barack Obama on Friday, and House Republicans said they will convene Sunday night as lawmakers seek to avoid the more than $600 billion in tax-and-spending changes.

Mr. Obama will meet at 3 p.m. Washington time with Republican House Speaker John Boehner, R-Ohio, and Senate Minority Leader Mitch McConnell, R-Ky., along with Senate Majority Leader Harry Reid, D-Nev., and House Minority Leader Nancy Pelosi, D-Calif. Mr. Obama had been negotiating one-on-one with Mr. Boehner.

An S&P gauge of homebuilders lost 0.9% even after better-than-forecast growth in home sales. The index of pending home sales climbed 1.7% to 106.4, the highest reading since April 2010, after a revised 5% gain in October, the National Association of Realtors reported Friday in Washington.

The MNI Chicago Report’s business barometer rose to 51.6 in December from 50.4 the prior month, above the reading of 50 that is the dividing line between expansion and contraction and higher than the median estimate of economists for 51.