Wall Street Climbs After Data

10 Nov 2012

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Wall Street

(Reuters) - Stocks rebounded on Friday after two days of steep losses as data showed U.S. consumer sentiment and wholesale business inventories were stronger than expected.

The S&P 500 fell 3.6 percent in the previous two sessions, its worst two-day performance in slightly over a year, following the U.S. election as investors shifted their focus back to the looming "fiscal cliff" and the euro zone's debt crisis.

Positive economic data helped equities bounce. U.S. consumer sentiment climbed to its highest level in more than five years in November, while wholesale inventories rose in September by the most in nine months. Reports Reuters.

Still, the fiscal cliff and the euro zone's debt crisis remain on the worry list for equities and the global economy.

The fiscal cliff, a combination of government spending cuts and tax increases set to go into effect early next year unless Congress acts to change the law before then, could take an estimated $600 billion out of the U.S. economy and push it into recession.

"Clearly, taxes are going up, and that is something the market doesn't like. There is concern the economy continues to weaken, and there is not much left in the tank, in terms of making corporate profitability better," said Stephen Massocca, managing director of Wedbush Morgan in San Francisco.

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