The leading stock indexes rose again Tuesday, with the Standard & Poor’s 500 index (SPY) and Russell 2000 index (IWN) registering their largest gains — 1.2% and 1.5%, respectively — since Nov. 19.
But while many of the biggest stocks finished up, there was a curious wrinkle in the market today: three tobacco companies, Altria Group (MO), Lorillard (LO) and Reynolds American (RAI) all saw their stocks fall. Altria’s shares fell 1.2%, while Lorillard and Reynolds saw declines of slightly more than 2%. For what it’s worth, the falls are part of a recent trend — the three companies’ stocks are down about 4% in December.
Elsewhere, in the Department of Never Happy: For weeks (months?) we’ve read stories telling us that going over the so-called fiscal cliff will plunge the fragile U.S. economy into recession. Today, as signs of a deal emerge, I’ve come across two pieces that argue that either we’re already heading into a recession or that a deal between the president and Congress will hurt the economy:
On the positive side, a sense that the United States is grappling with its longer-term deficits and debt problem could inspire businesses to hire and consumers to open their wallets, contributing to growth. On the other hand, the onset of austerity � not the austerity crisis, but just a down payment on deficit reduction of the sort at play in the negotiations � would sap economic activity now.
The question, then, is how powerful each of these forces is.
It looks like whatever happens in the next week or so, we’re destined to remain in crisis mode for some time to come.
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