Daily Data Flow: Stocks down from Negotiations; Mortgage Rates Spook Housing; GM Buys Back Shares

U.S. Stocks Fall on Housing Data, Budget Negotiations (Bloomberg)

U.S. stocks fell, pulling the Standard & Poor’s 500 Index (VIX) down from a two-month high, as deteriorating federal budget negotiations fueled concern that automatic tax increases and spending cuts will be triggered. “The underlying situation for U.S. equities isn’t bad, but a lot hinges on the fiscal cliff negotiations,” said George Feiger, chief executive officer of Contango Capital Advisors Inc., the San Francisco-based wealth management arm of Zions Bancorporation. “If we get through the fiscal cliff with a reasonable result, then the odds are quite substantial that things are going to be better than many people expect by the middle of 2013,” he said. “All of this can be postponed for a year if they screw up on the negotiations and we slide into a recession.”

Rising Mortgage Rates Spook Housing (CNBC)

Even with mortgage rates hovering near record lows, it doesn’t take much to send borrowers running for the hills. A slight move up from 3.47% on the 30-year fixed to 3.50%, caused mortgage refinance applications to plummet 14% from the previous week, according to the Mortgage Bankers Association. Mike Fratantoni, MBA’s Vice President of Research and Economics, said, “As a result, refinance applications dropped sharply to the lowest level in over a month.”

GM Buys Back Shares from Uncle Sam (MarketWatch)
The federal government, fresh from exiting AIG, announced Wednesday that perhaps as early as next month, it will sell off its remaining stake in General Motors Co., wrapping up another chapter of the “Bailout Era.” GM plans to buy 200 million shares from the U.S. Treasury before the end of the year, leaving the Treasury with just 300 million shares that it intends to sell into the equities market. The Treasury is giving itself up to 15 months to sell off its final stake.