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NEW YORK (Reuters) – U.S. stocks were poised for a lower open on Friday as President Barack Obama and top lawmakers planned to make a last-ditch attempt at budget talks to prevent the United States from going over the “fiscal cliff.”
Obama and lawmakers will meet at the White House Friday afternoon for talks before a New Year’s deadline to keep large tax hikes and spending cuts from taking effect and threatening the economy with recession.
Investors showed their skepticism about a deal coming in time as the benchmark SP 500 index was on track for a fifth straight decline.
With time running short to reach a complete agreement, members of Congress may attempt to pass a retroactive fix on tax rises and spending cuts soon after the automatic policies come into effect on January 1.
“Obviously all eyes will be on Washington and the headlines coming out of Washington will dictate today’s market movement,” said Peter Cardillo, chief market economist at Rockwell Global Capital in New York.
“You do have some economic data coming in, but the market is probably not going to pay much attention to that. The big thing is whether Washington will reach a deal by Monday.”
U.S. stocks fell for a fourth straight session on Thursday but managed to recover most of their earlier losses after the House of Representatives, in the barest sign of progress, said it would return to Washington on Sunday night to work on avoiding the cliff.
Highlighting market sensitivity to cliff headlines, on Thursday stocks fell more than 1 percent earlier in the session after Senate Majority Leader Harry Reid warned a deal was unlikely before the deadline.
With many market participants away for the holiday-shortened week, volume is expected to remain light, which could exacerbate market swings.
SP 500 futures fell 7.3 points and were below fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures lost 77 points, and Nasdaq 100 futures dropped 11.25 points.
Economic data expected on Friday includes Chicago PMI for December at 9:45 a.m. while the National Association of Realtors issues Pending Home Sales for November at 10 a.m. Economists in a Reuters survey forecast a reading of 51 for the main PMI index and a 1 percent rise in pending home sales.
MagicJack Vocaltec Ltd (CALL.O) forecast over $39 million in GAAP revenue and over 70 cents per share in operating income for the fourth quarter and appointed Gerald Vento president and CEO, effective January 1. Shares jumped 10.6 percent to $18 in light premarket trading.
Aeterna Zentaris Inc (AEZ.TO)(AEZS.O) U.S.-listed shares gained 4.6 percent to $2.27 before the opening bell after the company said it had reached an agreement with the U.S. Food and Drug Administration on a special protocol assessment by the FDA for phase 3 registration trial in endometrial cancer with AEZS-108 treatment.
(Reporting by Chuck Mikolajczak; Editing by Kenneth Barry)