Daily Data Flow: Stocks, Retailers Slump; Yen Dragging; Oil Prices Rally

U.S. Stocks Fall as Retailers Slump Amid Budget Deadline (Bloomberg)
U.S. stocks fell, sending the Standard & Poor’s 500 Index lower for a third day, as President Barack Obama and Congress prepared to resume budget talks and retailers slumped after the Christmas holiday. Eight out of 10 groups in the S&P 500 (SPX) retreated. “The finance center is still Washington right now,” Scott Armiger, a money manager at Christiana Trust in Greenville, Del. “With the fiscal cliff, the questions are how bad will the deal be or will they just extend it and let the new Congress address it?”

Sagging Yen Will Keep Dragging (CNBC)
Boris Schlossberg, a managing director at BK Asset Management, thinks Japan’s new prime minister will continue pressing the Bank of Japan for more stimulus moves and a higher inflation target, both of which would weigh on the currency. “Shinzo Abe is responsible probably for the greatest move in the yen,” Schlossberg told CNBC. “His two months of jawboning was more effective than $200 billion of intervention by the Bank of Japan.” Abe would like to see the yen at 90 to the dollar, Schlossberg said, and “it looks like the Bank of Japan is starting to come on board.”

Oil Prices Rally on Budget Hopes, Supply Fears (MarketWatch)
Crude-oil futures rallied on Wednesday, buoyed by optimism that a U.S. budget deal may be reached by the end of the year, and as investors eyed a potential supply disruption in Iraq. Oil, along with other markets, is “really being driven by the fiscal-cliff issues,” said Alex Ashby, research analyst at Global X Funds, referring to the looming package of tax increases and spending reductions that will take effect in the new year unless Washington crafts a budget agreement.