FILE - In this Nov. 15, 2012, file photo, traders work on the floor at the New York Stock Exchange, in New York. World stock markets meandered Tuesday, Dec. 4, as traders weighed a surprise drop in U.S. factory production against hopes that the U.S. will avoid the so-called fiscal cliff. (AP Photo/Seth Wenig, File)
FILE - In this Nov. 15, 2012, file photo, traders work on the floor at the New York Stock Exchange, in New York. World stock markets meandered Tuesday, Dec. 4, as traders weighed a surprise drop in U.S. factory production against hopes that the U.S. will avoid the so-called fiscal cliff. (AP Photo/Seth Wenig, File)
NEW YORK (AP) ? Stocks were edging lower on Wall Street in midday trading Tuesday as budget talks continued in Washington.
The Dow Jones industrial average fell 14 points to 12,952 as of 1:01 p.m. Eastern. The Standard and Poor's 500 was down four points at 1,405. The Nasdaq composite was down 16 points at 2,985.
Investors are waiting on developments from Washington in the budget talks aimed at avoiding the "fiscal cliff," a series of sharp government spending cuts and tax increases scheduled to start Jan. 1 unless an agreement is reached to cut the budget deficit. The measures, if implemented, could push the U.S. into recession, economists say.
Republicans, led by House Speaker John Boehner, have balked at President Barack Obama's proposal of $1.6 trillion in higher taxes over a decade, a possible extension of the temporary Social Security payroll tax cut and heightened presidential power to raise the national debt limit. The GOP on Monday proposed its own 10-year blueprint to President Barack Obama that calls for increasing the eligibility age for Medicare and lowering cost-of-living increases for Social Security benefits.
"Politicians are doing their negotiating dance. They both start out on their extreme positions. The question is how long until they get into the middle," said Rex Macey, Chief Investment Officer at Wilmington Trust Investment Advisors, in Atlanta. "The markets have discounted the information, so we're not seeing much movement."
Among stocks making big moves, Darden Restaurants fell $5.58 to $46.84 after the owner of the Olive Garden, Red Lobster and LongHorn Steakhouse restaurant chains revised its earnings outlook for fiscal 2013. Separately, analysts at Credit Suisse said that restaurant goers would "quickly lose their appetite," if the U.S. went over the "cliff," because the job cuts that would likely follow would curb discretionary spending.
Bill Gross, the managing director of fund manager PIMCO, told investors in his regular newsletter that they should expect annualized bond returns of 3 to 4 percent at best in the future and equity returns that are "only a few percentage points higher." The S&P 500 index has risen 12 percent so far this year. High debt levels and slowing global growth will weigh on the economy, Gross said.
The yield on the 10-year Treasury note fell 2 basis points to 1.6 percent.
Other stocks making big moves;
? Big Lots gained $3.34 to $31.38 after the discount retailer reported a loss that wasn't as bad as analysts had forecast. The company also raised its full-year earnings forecast.
? Pep Boys fell $1.46 to $9.22 after posting a loss on weak sales at the company's auto stores and reporting rising costs.
? MetroPCS fell 82 cents to $9.95 after Reuters reported that Sprint isn't currently considering making a counter offer for the cellphone business. MetroPCS and T-Mobile said in October that they had agreed to combine their businesses.
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