The stage was set Thursday night when a vote on Republican House Speaker John Boehner's Plan B, a fiscal cliff compromise to be presented to U.S. President Barack Obama, never even made it to vote among fellow Republicans. When word came of the setback, all major overnight future indexes sharply dropped.
When markets opened Friday, the slide continued. Shortly after noon, the Dow Jones Industrial Average slumped 176 points, the Standard & Poor's 500 Index dropped 20 points and the Nasdaq was lower by 43.
Investors appear to be bracing for the worst with just 10 days left before America falls over the cliff, with a deal is nowhere in sight.
Stocks on the Move TodayShares of Research in Motion (Nasdaq: RIMM) rang lower Friday, sinking almost 20% in mid-afternoon trading.
RIM reported third-quarter earnings after the close Thursday that showed the BlackBerry maker swung to profitability, but lost about one million subscribers in the quarter. It marked the first time membership has fallen. The real test, analysts say, comes next quarter following the much anticipated release of the company's new Smartphone, the BlackBerry 10.
Walgreen Co. (NYSE: WAG) shares were active Friday, slipping more than 4% after the company reported earnings of 43 cents per share in the first fiscal quarter of 2013, much lower than the 63 cents earned in the same period a year earlier.
Shares of NYSE Euronext NYSE: NYX), which garnered a $8.2 billion takeover bid from Intercontinental Exchange (NYSE: ICE) Thursday, dipped a few cents despite whispers that rival Chicago Mercantile Exchange (NYSE: CME) might make a counter offer for the Big Board.
Hemispherx Biopharma Inc (NYSE: HEB) plunged almost 24% after the tiny drug developer failed to win FDA backing for Ampligen, its treatment for chronic fatigue syndrome. Hopes for a big nod from the government agency for what would have been the first of its kind treatment for the debilitating ailment pushed HEB shares higher in anticipation leading up to the crucial decision. HEB fell to a mere 27 cents Friday.
In commodities, oil dipped $1.57 to $88.59 a barrel.
Gold, which took a beating a Thursday, closing lower by $21.60, or 1.4%, gained $12.90 Friday.
The yellow metal lost some of its luster after GDP numbers showed the economy was gaining mild, albeit slow, traction.
Also weighing on the precious metal was chatter that Morgan Stanley's (NYSE: MS) wealth management division is no longer recommending two funds led by legendary hedge fund manager John Paulson, who funds are among the largest investors in gold and gold equities.
Prospects of higher long-term capital gains rates and end of the year tax selling also contributed to the dramatic decline in the commodity.
Gold bugs maintain that once focus returns to the mushrooming U.S. government debt, elevated debt ceiling and loose global monetary policies, investor demand for gold is expected to pickup.
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- The Wall Street Journal:
Wall Street Slides After Fiscal Setback