Market Review By TraderXP: 

U.S. stocks fell this week, giving 500 Index Standard & Poor for the largest drop in almost two months, as investors watched the budget negotiations in Washington.
"Discussions on the budget agreement took care of all," said Richard Sichel, chief investment officer at Philadelphia Trust Co. "We have to get that from the home page. It just brings negative to the market."

S & P 500 fell 4.3 percent, its highest level since 2007, in September, U.S. President Barack Obama's re-election to create a budget showdown with the Republican-controlled House of Representatives. Test gauge rose 3.6 percent in November as the low bid for a compromise will be reached to avoid more than $ 600 billion in automatic tax increases and spending cuts that are set to start coming into force in January.

Market News

Wall Street endssour week with the fifth straight decline
Stocks fell for a fifth straight day on Friday, down 1 percent and marking the long losing S & P 500 during the three months, the federal government edgedcloser "financial cliff" no solutions in sight.
U.S. President Barack Obama and top congressional leaders met at the White House to work on a solution for the debt reduction draconian measures will come into force early next week. Stocks, which had been under the influence of a little more than a stream of news fiscalcliff from Washington in recent days, extended loss occurs in close to the Dow Jones Industrial Average and S & P 500 each lost 1 percent after a report that Obama will not offer new Republican plan. Dow closed below 13,000 for the first time since Dec. 4.
"I was shocked Obama had no plan, and this is why we have sold," said Mike Shea, managing partner at Direct Access Partners LLC in New York. "He's going to get to come home to him with something else. I think it's a surprise. Entire market disappointed in the lack of leadership in Washington."
As a sign of investor concern, CBOE VolatilityIndex, known as the VIX, jumped 16.69 percent to 22.72, closing at the highest level since June. Favorite barometer of fear on Wall Street has grown for five straight weeks, rising more than 40 percent over the period.
Index Dow Jones Industrial Average fell 158.20 points, or 1.21 percent, to 12,938.11 at the close. 500 Index Standard & Poor lost 15.67 points, or 1.11 percent, to 1,402.43. Index Nasdaq Composite fell25.59 points, or 0.86 percent, to end at 2,960.31.
For the week, the Dow fell 1.9 percent. S & P 500 also lost 1.9 percent this week, celebrates its worst weekly performance since mid-November. TheNasdaq finished the week by 2 percent. Unlike the VIX jumped 22 percent for the week.
Pessimism continued after the close of the market, with stock futures indicate even steeper losses. S & P 500 futures fell 26.7 points, or 1.9 percent, eclipsing the decline seen in the regular session.
All 10 S & P 500 fell sector during regular Friday trading, with most posting a decline of 1 percent, but energy and materials stocks were among the weakest in the day, with both groups closelytied to growth.
S & P energy sector index slipped 1.8 percent, with Exxon Mobil fell 2 percent to $ 85,10, Chevron Corp and from 1.9 percent at $ 106.45. S & P materials sector index fell 1.3 percent, with the United States Steel Corp up 2.6 percent at $ 23.03.
Decliners outnumbered advanced in the ratio a little more than 2 to 1 on the New York Stock Exchange, while on the Nasdaq, two stocks fell for each that rose.
"We were whipsawing around at low volume and rumors that go on the rock," said Eric Green, senior portfolio manager at Penn Capital Management in Philadelphia, which helps control the $ 7 billion in assets.
Over time, less and less, legislators may choose to allow higher taxes and for-the-board federal spending cuts will take effect and try to go back patch soon after the new year. Standard & Poor said the impasse on the rock will not affect the sovereign credit rating of the United States.
"We are not so concerned with the January 1, as the market seems to be," said Richard Weiss, a senior money manager at American Century Investments in Mountain View, California. "Everything will be solved, just maybe not a good schedule, and any deal could easily be applied retroactively."
Trading volume was light throughout the holiday shortened week, with only 4.46 billion shares hands on the New York Stock Exchange, NYSE, Nasdaq and MKT on Friday, below the daily average this year of about 6.48 billion shares. On Monday, the U.S. stock market closed early for Christmas, and the market was closed on Tuesday for Christmas. Many senior traders absent this week for the holidays.
Underlining the sensitivity of Wall Street to the events in Washington, the stock fell more than 1 percent on Thursday after Senate Majority Leader Harry Reid warned that the deal is unlikely to term. But at the end of the day, shares almost jumped back when the house is said to hold extraordinary session on Sunday working in the financial decision.
Positive economic data failed to change the mood in the market.
The National Association of Realtors said contracts to buy previously owned U.S. homes rose in November to its highest level in 2-1/2 years, while the report of the Institute for Supply Management Chicago showed business activity in the U.S. Midwest expanded in December.
"Economic reports have been very favorable, and when Congress comes to a decision, the market should resume the upward trend, based on the data," said Weiss, who helps control about $ 125 billion in assets. "Other things being equal, we see further decline as a buying opportunity."
Barnes & Noble Inc rose 4.3 percent to $ 14.97 after the top U.S. bookstore chain said British publisher Pearson Plc has decided to make a strategic investment in its subsidiary Nook Media. But Barnes & Noble also said that its Nook business does not meet its previous forecast for the fiscal year 2013.
MagicJack VocalTec Ltd shares jumped 10.3 percent to $ 17.95 after the company gave a strong fourth quarter and forecast named Gerald Vento President and Chief Executive Officer, effective January 1.
US-listed shares of the Canadian pharmaceutical Aeterna Zentaris Inc rose by 13.8 percent to $ 2.47 after the company said it has reached an agreement with the U.S. Food and Drug Administration on a special protocol assessment from the FDA for Phase 3 registration trial in endometrial cancer with CEA-108 treatment. Reuters.com

Currencies

Dollar edges higher on uncertainty about the financial negotiations
The dollar rose to two-week high against the dollar on Friday, as uncertainty regarding the financial talks in Washington in order to avoid tax increases and spending cuts for next year drove investors to the relative safety of the U.S. currency.
U.S. President Barack Obama is planning to make a new proposal at a White House meeting with congressional leaders on Friday to avoid the so-called "financial cliff" that looms on January 1 source familiar with the meeting said.
"Headline risk is likely to remain the driver of foreign exchange markets in the short term," said Eric TMF, FX strategist at Scotia Capital in Toronto.
Agreement on the U.S. budget will be considered aspositive riskier currencies such as the euro and the Australian dollar, while a deadlock is considered positive for the safe haven U.S. dollar and highly liquid.
Conflicting events in Washington over the budget debates caused volatility in the dollar. On Thursday, the dollar rose after Senate Majority Leader Harry Reid warned that the United States appears to be headed to the "financial cliff". But he refused to come on the news of the house of representatives on Sunday.
Over time, less and less, legislators may choose to allow higher taxes and for-the-board spending cuts to take effect and try to get back patch soon after the new year. Standard & Poor said the impasse on the rock will have no impact on the sovereign credit rating of the United States.
Dollar hit a two-week high against a basket ofcurrencies at 79.930. It was last up 0.1 percent at 79.665.
The euro fell 0.1 percent to $ 1.3221, having hit a session low of $ 1.3164 according to Reuters after a stop-loss order to sell at around $ 1.3170. On the week, the euro gained 0.3 percent against the dollar, its third straight week of gains.
The euro has made rapid strides since mid-November, gaining 5 percent in the month to hit 8-1/2-month high of $ 1.3308 on Dec. 19, as concerns over the debt crisis theeuro zone ebbed.
"Prices have become so overbought that there was little enthusiasm to rally further. When sales began, he quickly summoned stops across the board, taking the euro / dollar below the $ 1.3200 level," said Boris Schlossberg, Managing Director of Strategy FX, at BK Asset Management in New York.
Although analysts partly due to the fall of the euro by year-end dollar demand and thin liquidity, they said, unwinding long europositions also weighed on the currency.
"There is still a good chunk of skepticism among market participants about the euro is much higher than the $ 1.32-$ 1.33 level," said Ulrich Leuchtmann, head of FX research at Commerzbank.
"Speculators are not very happy with these levels and look at it as a good opportunity to sell the euro, leading to a rapid drop in the euro / dollar."
The euro fell 0.2 percent to 113.78 yen, having earlier hit a 17-month high.
The dollar was steady against the yen at 86.06 yen, having earlier risen to 86.63 yen, the strongest since August 2010. Tradersreported barriers at 86.75 and at 87.00 yen.
Expectations of the new Japanese Prime Minister Shinzo Abe, the government will insist on further easing of monetary policy weighed heavily on the yen and analysts say that could fall further. Yen hit a two-year lows against the dollar for three consecutive days.
Received 12 percent of the dollar against the yen in 2012, putting it on the way to the largest annual percentage decline since 2005.
Dollar appeared before the week above its 200-week moving average, now around 84.95 yen, the first time since the end of December 2007, technical signal indicative of future growth.
On the week, the dollar rose about 2 percent against the yen, its seventh straight week benefits.
Jens Nordvig, global head of G10 strategy at Nomura Securities in New York, said he expects the Bank of Japan to move in the direction of 2 percent inflation target at the January meeting, and plans to purchase foreign bond program will be announced in the second quarter.
"Mr. Abe has been consistent in signaling an aggressive push to monetary easing. Importantly, this push is likely to be front loaded," he wrote to clients. Nomura predicts that the dollar will rise to 90 yen by the end of the second quarter, compared with the previous goal 85yen. Reuters.com