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US stocks push lower in slow march to fisc

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November 17 2012, 12:36AM

US stocks have remained locked in a six-week slide under clouds from the global and domestic economy and worries that more political infighting will send the country over the fiscal cliff.

A slight rebound on Friday left a positive note on another downbeat week, with caution the byword ahead of the likely thinly-traded Thanksgiving holiday period ahead, analysts said.

Tech stocks were particularly hit by heavyweight Apple's continuing fall, with the iPhone and iPad maker losing 3.5 per cent and the tech sector generally off 2.3 per cent since the previous Friday.

For the week, the S&P lost 1.45 per cent to 1359.88, leaving it still more than eight per cent higher for the year.

The narrower Dow Jones Industrial Average fell 1.77 per cent to 12,588.31, up three per cent since January 1.

The Nasdaq Composite gave up 1.78 per cent to 2853.13.

Disappointing earnings and forecasts from giants like Dell and Walmart underscored the gloomy impression left by the third quarter earnings season.

But the broader mood was set by the post-election showdown between Democrats and Republicans over how the beat the fiscal cliff tax hikes and spending cuts slated to hit the economy at year end, very possibly sending it back into recession.

Stocks turned up slightly on Friday as the White House opened talks with congressional leaders on the cliff and the deficit, and politicians on both sides professed a sense of urgency and readiness to compromise.

"There is no more, let's do it some other time," said Senate Democratic leader Harry Reid. "This isn't something we're going to wait until the last day of December to get it done."

"Markets, which have fallen very quickly, want to believe in an agreement" on the cliff, said Gregori Volokhine of Meeschaert New York, explaining the 0.48 per cent rise in the S&P 500 on Friday.

The Thanksgiving holiday breaks up trade next week, and analysts said movements are likely to be determined by the news.

"We have a very light schedule next week with Thanksgiving on Thursday," said Jack Ablin, of Harris Private Bank.

"We get some housing data early on, so I'm hopeful we'll see a window on the progress we are making on housing.

"But in general, I still believe that the market will pivot off headlines."

Economists Nigel Gault and Paul Edelstein at IHS Global Insight said most of the focus will be on the fiscal cliff and deficit reduction talks.

"Unless a deal is struck next week, which seems unlikely, it should be another down week for global equities and another strong weak for the US dollar and Treasuries.

"The only consolation is that trading volumes may be thin heading into the Thursday holiday."