Wall Street flat, dollar firm day before U.S. election

Mon Nov 5, 2012 4:09pm EST
 

By Richard Leong

NEW YORK (Reuters) - U.S. stocks held steady and the dollar edged up on Monday as investors played it safe on the day before Americans choose their president and as Greece headed into two key votes to secure further rescue funds.

Some investors see the U.S. election as a hurdle to get through so markets can turn attention to the "fiscal cliff" budget battle. The world's biggest economy faces the possibility of $600 billion in automatic spending cuts and tax hikes, should Congress not reach a deal to mitigate its effects.

Opinion polls show the race between President Barack Obama and Republican challenger Mitt Romney remains neck-and-neck at the start of the last day of campaigning, and the uncertainty over the outcome left financial markets jittery.

There is a possibility that the election will be too close to call in a number of states. A delayed result could roil markets as it did in the protracted 2000 election battle.

"Given this huge event is so close, now it just makes sense to wait," said Jack Ablin, chief investment officer of Harris Private Bank in Chicago.

Delegates at a G20 meeting this weekend in Mexico City pressed the United States to act decisively on tax and spending issues.

Safe-haven bids pushed the U.S. dollar up about 0.2 percent to two-month highs against a basket of major currencies .DXY and German two-year government bond yields dropped below zero for the first time in two months on safety demand.

Demand for low-risk assets pushed the price of the benchmark U.S. 10-year Treasury note up 10/32 with a yield of 1.688 percent, down 3 basis points from late on Friday. <US/>   Continued...

 
A city trader monitors stock prices in London.