Stocks Drop on Cliff Uncertainty

U.S. stocks declined on Friday, as investors fixated on the lack of a federal government budget deal and ignored upbeat economic reports in the U.S. and China.  Down 0.2% for the week, the Dow Jones Industrial Average lost 35.71 points, or 0.27%, to 13,135.01. The S&P 500 shed 5.87 points, or 0.41%, to 1,413.58, off 0.3% from the prior Friday’s close. The Nasdaq Composite declined 20.83 points, or 0.70%, to 2,971.33, down 0.2% for the week.

U.S. factories rebounded in November from Superstorm Sandy, boosting production of cars, equipment and appliances. The Federal Reserve said Friday that factory output increased 1.1 percent in November from October. That offset a 1 percent decline in the previous, which was blamed on the storm.

China’s vast manufacturing sector grew in early December and U.S. factories were having their best month since April, surveys showed on Friday, adding to hopes that the world’s top two economies were on the mend.

The Federal Reserve moved Friday to place large foreign banks under the same regulatory regime it applies to domestic banks, aiming to reduce the risk of a foreign bank collapse hurting the US financial system.