NEW YORK (Reuters) - Stocks dipped on Friday as President Barack Obama and top Republicans remained at odds about how to avert a series of tax hikes and spending cuts next year that could push the economy into recession.
Trading has been choppy as investors react to a barrage of mixed statements from policymakers on the state of discussions about how to avoid going over the "fiscal cliff."
Obama accused a "handful of Republicans" in the U.S. House of Representatives of holding up legislation to extend tax cuts for middle-class Americans in order to try to preserve them for the wealthy.
Speaking shortly after the president, House Speaker John Boehner, the top Republican in Congress, said: "There is a stalemate; let's not kid ourselves."
The market, however, has remained resilient, with the benchmark S&P 500 set to finish the month almost flat as many investors are betting that a deal will be struck - if only at the zero hour.
"There is no sign of it from the rhetoric, but there are expectations it will happen," said Steve Goldman, principal at Goldman Management in Short Hills, New Jersey. "The rhetoric will get worse before it gets better."
Corporations still anticipate a harsher tax regime next year. Whole Foods Market Inc
The Dow Jones industrial average <.dji> dropped 14.56 points, or 0.11 percent, to 13,007.26. The Standard & Poor's 500 Index <.spx> fell 2.17 points, or 0.15 percent, to 1,413.78. The Nasdaq Composite Index <.ixic> lost 6.66 points, or 0.22 percent, to 3,005.37.
The S&P 500 was on track to end the month up about 0.1 pct, or nearly flat, after declining almost 2 percent in October. The index has recovered 4.5 percent since shedding 8 percent following the U.S. presidential election earlier in November.
"The correction from the S&P 500's September peak has allowed overbought momentum and optimistic sentiment conditions to recede, and we believe the index is closer to an intermediate-term buy signal than a sell signal," said Ari Wald, an analyst at PrinceRidge Group.
Yum Brands Inc
After a close relationship for several years, Facebook Inc
Zynga's stock dropped 6.5 percent to $2.45. Facebook's stock slipped 0.2 percent to $27.26.
The markets' reaction to data on Friday was muted.
Data from the Institute for Supply Management-Chicago showed that business activity in the U.S. Midwest expanded for the first time since August, buoyed by an improvement in the labor market.
But Commerce Department data showed U.S. consumer spending fell in October for the first time in five months as income growth stalled, suggesting slower economic growth in the fourth quarter.
Apple Inc's latest iPhone has received final clearance from Chinese regulators, paving the way for a December debut in a highly competitive market where the lack of a new model had severely eroded its share of product sales. Apple's stock fell 0.8 percent to $584.57.
Verisign Inc
(Editing by Bernadette Baum and Jan Paschal)
Wall Street edges lower as "fiscal cliff" debate drags
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Wall Street edges lower as "fiscal cliff" debate drags
