Nov. 30 - Summary of business headlines: Wall Street preoccupied with fiscal cliff talks; Sandy nicks consumer spending; regional manufacturing improves; Whole Foods announces special dividend; Yum Brands, Zynga and Groupon have tough day. Jeanne Yurman reports.
Wall Street continues to be totally preoccupied with each rumbling coming from Washington about the impending 'fiscal cliff'. Stocks slipped as the President and top Republicans remain at odds over a deal. Friday wraps up the month. Blue chips lost less than one percent in November, while the Nasdaq tacked on one percent. Hurricane Sandy knocked out power and consumer spending last month. In the last days of October, the superstorm dented Northeast incomes and choked off car sales forcing U.S. spending lower by a surprise two tenths of one percent. It was the first decline since May. Meanwhile incomes nationwide remained flat after slowly rising for 11 straight months. A regional manufacturing survey for the Midwest showed that business activity expanded for the first time since August. Whole Foods became the latest company to offer special dividends. The grocery store chain will dish out an extra $2 per share to shareholders on record by December 10th. Many companies are offering stakeholders beefed up one-time dividends before the end of the year to benefit from current tax rates. If Congress fails to act on the fiscal cliff, taxes on dividend income could jump to nearly 40% from the current 15. The surge in special dividends benefits those well beyond Wall Street says J.P. Morgan Strategist, Tom Lee. SOUNDBITE: TOM LEE, CHIEF U.S. EQUITY STRATEGIST, J.P. MORGAN (ENGLISH) SAYING: "The U.S. household today owns about 17 trillion dollars of stocks of which about seven or eight trillion is through mutual funds. The majority of stock holdings is direct equity holdings. So most of these special distributions are actually going into the pockets of households." Yum Brands, the parent company of KFC, Pizza Hut and Taco Bell got walloped Friday after warning that sales would drop in China, its biggest market. Shares of gaming company, Zynga, got clipped after disclosing that it will no longer be the exclusive game developer for Facebook. And a tough day too for Groupon, the daily deals website, after the board chose to keep CEO Andrew Mason at the helm. Its shares are down 85 percent since its IPO a year ago, closing at roughly $4. A brighter story in Europe. Stocks were mixed on the day but overall posted the sixth straight monthly gain.