U.S. stocks finished slightly lower in a quiet session on Tuesday (December 4) as the back-and-forth wrangling over the "fiscal cliff" gave investors little reason to act.
Trading volume was light as legislators continue to negotiate a deal to avoid a $600 billion (USD) package of tax hikes and federal spending cuts that would begin Jan. 1 and could push the economy into recession.
Just 5.86 billion shares changed hands on the New York Stock Exchange, the Nasdaq and the NYSE MKT, below the year's daily average of 6.48 billion shares.
A key measure of investor anxiety has remained muted. The CBOE Volatility Index or VIX, a gauge of market anxiety, was at 17.13, up 2.9 percent. It has not traded above 20 since July.
Optimism for progress was dented after remarks by President Barack Obama, who rejected a Republican proposal to resolve the crisis as "out of balance" and said any deal must include a rise in income tax rates on the wealthiest Americans.
Expectations of higher taxes on dividends beginning in 2013 have pushed many companies to pay special dividends this year or advance their next payback to investors. Coach became the latest to move up the date of its next dividend payment, and the news lifted shares of the upscale leather-goods maker earlier in the session. By the close, though, Coach was down 1.2 percent at $57.52.
One of the S&P 500's top sectors for the day was health care, considered a defensive group.
The Dow Jones industrial average fell 13.82 points, or 0.11 percent, to 12,951.78 at the close. The Standard & Poor's 500 Index dipped 2.41 points, or 0.17 percent, to 1,407.05. The Nasdaq Composite Index shed 5.51 points, or 0.18 percent, to close at 2,996.69.
The market has been sensitive to rhetoric from Washington, as a failure to reach an agreement could send the U.S. economy back into recession. Still, many expect a resolution to be found, which could extend the S&P 500's rally of 12 percent so far this year.