Daily Data Flow: U.S. Government Reports Fourth-Largest Deficit Since World War II; S&P 500 Endures Biggest One-Week Drop in Four Months

U.S. Posts Fourth-Largest Budget Deficit Since WWII (Bloomberg)
The U.S. government budget deficit for the fiscal year ended in September was the fourth-largest since World War II as lawmakers debate the impact of the looming spending cuts less than one month before the presidential election on Tuesday, Nov. 6. The shortfall registered $1.09 trillion in fiscal 2012, down from $1.3 trillion in 2011, according to Treasury Department data issued today in Washington. The U.S. government faces a so-called” fiscal cliff” of $1.2 trillion in mandated spending cuts, in addition to the expiration of George W. Bush-era tax reductions, if Congress can’t agree by Dec. 31 on ways to reduce the deficit.

U.S. Stocks Decline as Europe, Banks Offset Economy (Bloomberg)
U.S. stocks fell to give the Standard & Poor’s 500 Index its biggest weekly drop in four months, as a slump in European and financial shares overshadowed an unexpected jump in consumer confidence. “You’re in the midst of earnings season, which has been kind of blah,” said Malcolm Polley, who manages $1.1 billion as chief investment officer at Stewart Capital in Indiana, Pa. Of the 35 S&P 500 companies that have reported since Oct. 10, 69% have reported earnings that have exceeded analysts’ estimates, while 51% posted sales that topped projections, according to data compiled by Bloomberg.

The Facts Behind Romney’s $5 Trillion Tax Plan (CNNMoney)
Mitt Romney promises to pay for his $5 trillion in proposed tax cuts to avoid adding to deficits, in large part, by limiting tax breaks for the rich. The independent Tax Policy Center has estimated that Romney’s plan could reduce revenue by roughly $500 billion a year on average — or $5 trillion over a decade.

Oil Falls as IEA Lowers Yearly Demand View (Marketwatch)
Crude-oil prices fell Friday as investors seemed to expect weakened demand, while monitoring Middle East tension closely. Friday’s “choppy and mixed market” reflected “a battle between supply and demand [concerns] and geopolitical,” considerations, said Bill O’Neill, a principal with Logic Advisors in New Jersey. He noted that supply and demand data lean bearish. But “all things being equal, the market is very fully priced at these levels,” he said. “Barring some sort of major geopolitical event, the market could test those recent lows under $90.”