(MENAFN - ProactiveInvestors - Australia) U.S. equity markets were lower Friday afternoon as investors fixated on the lack of a federal government budget deal and ignored upbeat economic reports in the U.S. and China.
By the close the Dow Jones was off 36 points to 13,135, while the NASDAQ dropped 21 points to 2971.
Investors were keeping a nervous eye on talks to avert the fiscal cliff, a round of automatic tax hikes and spending cuts due to kick in January 1 unless a deal can be reached.
Overnight, the HSBC Flash PMI report out of China showed expansion in the manufacturing sector. The index rose to 50.9 from November's 50.5.
Meanwhile, the eurozone Markit composite PMI reported that manufacturing activity rose only slightly. This index rose to 46.3, which was just one tenth of a point better than the previous month.
U.S. Economic News
On the economic front, the Labour Department reported today that the cost of living fell last month by 0.3%, slightly higher than the expected 0.2% decline forecast by economists. This followed a 0.1% increase the month before.
Excluding food and energy, the CPI rose 0.1%, following a boost of 0.2% in October. The median market forecast was for a 0.2% rise.
U.S. industrial production rose 1.1% in November as manufacturing picked up after Hurricane Sandy.
Meanwhile, the first half of December has so far been good for the nation's manufacturers based on the PMI flash index, which rose to 54.2, up a solid 1.4 points from the final index for November. A reading over 50 indicates monthly growth in business activity.
U.S. Corporate News
In corporate news, Apple (NASDAQ:AAPL) shares fell almost 4 per cent on Friday after the iPhone 5 debuted in China to a cool reception and two analysts cut shipment forecasts.
Schlumberger (NYSE:SLB) warned Friday that that its fourth quarter earnings would take a hit due to continued contractual delays in some regions and weaker than expected activity in North America - news that is expected to weigh down the oil services sector today.
Healthcare insurer Centene Corp. (NYSE:CNC) also saw its shares fall over 8% Friday, after it slashed its full-year earnings guidance for 2012, citing higher medical costs.
United Technologies Corp (NYSE:UTX) said it expects its profit to rise about 13% next year, with growing demand for its systems that are used in buildings helping to offset lower U.S. defense spending.
Cable TV company Discovery Communications (NASDAQ:DISCA) Friday said it was buying 12 TV networks in Norway, Sweden, Denmark and Finland in a deal worth around 1.7 billion.
Dutch paints and chemicals group Akzo Nobel Friday said it has sold its Decorative Paints business to rival PPG Industries (NYSE:PPG) for 1.05 billion.