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Saturday, November 10, 2012

US Stocks end election week down 2% (ext.CNN)

NEW YORK (CNNMoney) -- U.S. stocks eked out minute gains Friday but closed out election week down more than 2%.

It's been a rough week. Stocks sold off Wednesday and Thursday as investors' attention quickly shifted from the election to the looming fiscal cliff, and the potential consequences for the U.S. and global economies if Congress fails to avert it.

On Friday, President Obama spoke about raising taxes on the wealthiest Americans. The White House also reiterated that Obama would veto any bill that extended the Bush tax cuts for the top 2% of wage earners. Obama said he will meet with Republican and Democratic leaders next week to discuss how to move forward regarding the fiscal cliff.

The Congressional Budget Office warned on Thursday that the fiscal cliff could trigger a drop of 0.5% in real gross domestic product next year, and that contraction could push unemployment to 9.1% by the end of 2013.

It appeared early Friday morning that fiscal cliff fears would lead to a third straight down day. But the Dow Jones industrial average finished the day flat, while the S&P 500 and Nasdaq Composite moved up between 0.2% and 0.3%.

All three indexes moved down between 2.1% and 2.6% for the week. For both the Dow and S&P 500, it was the worst weekly percentage drop, since the week ending June 1. Still, stocks remain up between 5% and 11% for the year.

"I think the selling we've seen is very real," said Joe Saluzzi, co-head of trading at Themis Trading. "Now that the election is over, I think we'll see more selling through the end of the year."

The S&P 500 ended the week a few points below its 200-day moving average of 1,383, a level that investors see as a line separating a bear and bull market. While traders typically get worried when stocks break that level, Ryan Detrick, a strategist at Schaeffer's Investment Research, said stocks have actually rallied over the next six months in 8 out of the 12 times this has happened since 2000.

Currencies and commodities: The dollar rose against the euro and the British pound but declined versus the Japanese yen.

Oil for December delivery rose 98 cents to $86.07 a barrel.

Gold futures for December delivery edged up $4.90 to $1,739.90 an ounce.

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