Category: Markets / Finance / November 27, 2012 8:23 PM EST
The euro and U.S. stocks dropped on Tuesday (November 27) as concern over the threat to the world economy posed by the U.S. "fiscal cliff" offset optimism from a deal to ease Greece's debt burden, though European and Asian stocks gained on initial investor optimism.
The downdraft in U.S. stocks was in contrast to moves higher on other stock markets around the world, while safe-haven German bonds fell after global lenders reached a new deal to reduce Greece's debt and release loans needed to keep the country afloat.
But as Democrats and Republicans prepared to resume budget negotiations in Washington, investors re-evaluated risk.
President Barack Obama will launch a multipronged push this week to garner support for his proposals on avoiding sharp tax increases and spending cuts that will otherwise take effect at the beginning of 2013 and could hurt economic growth.
Positive U.S. economic data failed to alleviate concerns. A gauge of planned U.S. business spending increased by the most in five months in October. But a fourth straight month of declines in shipments underscored the damage inflicted by fears of tighter fiscal policy next year.
Although stocks waxed and waned during the U.S. session, they ultimately lost ground as investors found little to sustain gains.
The Dow Jones industrial average ended down 89.24 points, or 0.69 percent, at 12,878.13. The Standard & Poor's 500 Index was down 7.35 points, or 0.52 percent, at 1,398.94. The Nasdaq Composite Index was down 8.99 points, or 0.30 percent, at 2,967.79.