Stocks Closed with Modest Losses

U.S. stocks closed with modest losses in light trading Monday during a shortened holiday trading session with lawmakers running out of time to reach a budget deal that would prevent the U.S. from going over the so-called fiscal cliff. The Dow Jones Industrial Average fell 51.76 points, or 0.39%, to 13,139.08. The S&P 500 index lost 3.49 points, or 0.24%, to 1,426.66. The Nasdaq Composite declined 8.41 points, or 0.28%, to 3,012.60.

Treasury rates are expected to stay low as 2013 starts, according to BMO Capital Markets, thanks to the Federal Reserve keeping benchmark interest rates low and buying Treasury and mortgage-backed securities.

The U.S. dollar gained against the yen Monday after Japan’s incoming prime minister said the country must defend itself as other nations attempt to devalue their currencies. In thin, pre-holiday dealings, the dollar (ICAPC:USDJPY) rose to 84.81 yen, up from ¥84.13 in North American action late Friday.

Dock workers are readying to strike next weekend along the East and Gulf Coasts in a labor dispute that threatens shipments of retail goods, food and components used in manufacturing.

Oil futures traded lower on Monday, extending losses on uncertainty whether Washington will reach a deal to avert tax increases and spending cuts before the end of the year. Crude oil for February delivery (NMN:CLG3)  slipped 15 cents, or 0.2%, to $88.51 a barrel on the New York Mercantile Exchange.

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