A shopper walks down an aisle in a newly opened Walmart Neighborhood Market in Chicago in this September 21, 2011 file photo.

NEW YORK | Fri Dec 21, 2012 10:21am EST

NEW YORK (Reuters) - Consumer sentiment slumped in December as Americans were rattled by on-going negotiations to avert the tax hikes and spending cuts set to come into effect in the new year, data showed on Friday.

The Thomson Reuters/University of Michigan's final reading on the overall index on consumer sentiment tumbled to 72.9 from 82.7 in November, worse than forecasts for 74.7.

It was the lowest level since July and also came in under December's preliminary figure of 74.5.

Talks to avoid the so-called fiscal cliff were thrown into disarray on Thursday evening when Republican lawmakers failed to back an effort by House of Representatives Speaker John Boehner that was designed to extract concessions from President Barack Obama.

Economists say the economy could fall back into recession next year if the changes are allowed to go into full effect.

Record numbers of consumers spontaneously mentioned their concerns that no resolution would be reached before year-end, the survey said.

"Even if something is passed in the next week, unless it includes an extension of the payroll tax holiday, as well as no increase in income taxes except for the wealthy, consumers are likely to be disappointed," survey director Richard Curtin said in a statement.

Of those surveyed, 27 percent said they were concerned about higher taxes, topping the prior high of 26 percent seen in August 2011 in the wake of the drawn-out debt ceiling debate.

U.S. stocks as measured by the SP500 index were down about 1.0 percent in morning trading as hopes faded that a fiscal deal would be reached soon.

Consumers were also less upbeat about the economic outlook, with 35 percent expecting unemployment to rise during 2013, up from 19 percent in October. Only one-third expected an uninterrupted economic expansion over the next five years.

The barometer of current economic conditions slipped to 87.0 from November's 90.7, while the gauge of consumer expectations fell to 63.8 from 77.6.

The survey's one-year inflation expectation edged up to 3.2 percent from 3.1 percent, while the survey's five-to-10-year inflation outlook rose to 2.9 percent from 2.8 percent.

(Reporting by Leah Schnurr)

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Thu Dec 20, 2012 9:57pm EST

n">(Reuters) - Research In Motion shares tumbled more than 10 percent on Thursday after the company reported the first ever decline in its subscriber numbers and outlined plans to transform the way it charges for its BlackBerry services.

RIM, which hopes to revive its fortunes and reinvent itself via the launch of a brand new line of BlackBerry 10 devices next month, caught investors off-guard on its quarterly conference call, when it said it plans to alter its service revenue model - a move that will pressure the high-margin business that accounts for about a third of RIM's sales.

"RIM provided few details regarding the economics of these changes, thus adding a large cloud of uncertainty to the primary driver of its profitability, which we view as especially worrisome given risks already surrounding the firm's massive BlackBerry 10 transition," said Morningstar analyst Brian Colello.

Those subscribers who need enhanced services like advanced security will pay for these services, while those who do not use such services will generate much lower to no service revenue, RIM Chief Executive Thorsten Heins told analysts and investors on a conference call on Thursday.

"I want to be very clear on this. Service revenues are not going away, but our business model and service offerings are going to evolve ... The mix in level of service fees revenue will change going forward and will be under pressure over the next year," cautioned Heins.

The news startled investors, who had earlier in the evening pushed RIM's stock more than 7 percent higher in post-market trading, after the company reported a narrower-than-expected quarterly loss and said it boosted its cash cushion ahead of next month's crucial launch of the BlackBerry 10 smartphone.

RIM's shares have for weeks been on a tear as optimism around BB10 has grown. Following RIM's surprise announcement on service revenues, however, the stock ended 9 percent lower at $12.85 in trading after the closing bell.

Analysts also expressed concern about the decline in RIM's subscriber base.

"The early reaction was probably just 'Hey, numbers looked OK, better loss, the cash flow was good' but if you know the company, you're looking at the subscriber base falling off," said Mark McKechnie at Evercore Partners in San Francisco.

CASH BALANCE

One reason the shares rose earlier was RIM managed to build up its cash cushion to $2.9 billion from $2.3 billion in the previous quarter.

Analysts have been keeping a sharp eye on the size of RIM's cash pile, as RIM will need the funds to manufacture and effectively promote BlackBerry 10 in a crowded market.

RIM is counting on the new line to claw back market share lost in recent years to the likes of Apple Inc's iPhone and a slew of devices powered by Google Inc's Android operating system.

"They've done a great job at generating cash," said Raymond James analyst Tavis McCourt in Nashville. "They're certainly in a much better position than they were three or four quarters ago."

The Waterloo, Ontario-based company said it is now testing its BB10 devices with more than 150 carriers - up from about 50 carriers as of the end of October. RIM expects more carriers to come on board ahead of the formal launch of BB10 on January 30.

Positive feedback from developers and carriers around RIM's new BlackBerry 10 devices has buoyed the stock in the last three months. Despite the plunge in RIM's share price on Thursday, the stock has more than doubled in value the last three months.

SMALLER-THAN-EXPECTED LOSS

On an operating basis, RIM fared a little better than Wall Street had expected. It reported a loss of $114 million or 22 cents a share, excluding one-time items. Analysts, on average, had forecast a loss of 35 cents a share, according to Thomson Reuters I/B/E/S.

RIM also reported a surprise net profit of $9 million, or 2 cents a share, for its fiscal third quarter ended December 1, on the back of a one-time income tax related gain. That compared with a year-ago profit of $265 million, or 51 cents.

RIM said it shipped 6.9 million smartphones in the quarter, even as its subscriber base fell to about 79 million in the quarter from about 80 million in the period ended September 1.

In recent years, RIM's user base has grown, even as the BlackBerry lost ground in North America and Europe, boosted by gains in emerging markets. While eye opening, the shrinkage was not as bad as some observers expected during the last quarter before the BB10 launch.

"We're encouraged that the subscriber base only declined slightly during a very public transition, and BlackBerry sales were about what we expected," said Morningstar's Colello, who is based in Chicago.

(Reporting by Euan Rocha; Additional reporting by Alastair Sharp, Cameron French, Allison Martell and John Tilak in Toronto; Editing by Janet Guttsman, Frank McGurty, Jan Paschal and Chris Gallagher)

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1 of 4. Trader Fred Demarco works on the floor of the New York Stock Exchange, October 12, 2012.

NEW YORK | Fri Oct 12, 2012 8:12pm EDT

NEW YORK (Reuters) - Stocks wrapped up their worst week in four months, led lower on Friday by financial shares as results from Wells Fargo and JPMorgan ignited concerns about shrinking profit margins for big lenders.

Shares of Wells Fargo (WFC.N) fell 2.6 percent to $34.25 and JPMorgan Chase & Co (JPM.N) lost 1.1 percent to $41.62 as concerns grew over their lower net interest margin - the difference between what a bank pays on deposits and what it makes on loans - which could narrow further as the Federal Reserve keeps interest rates near zero.

The lackluster market reaction came even though both Wells Fargo and JPMorgan, the two largest U.S. financial stocks by market value, reported record profits.

"Bank shares as a group have had a nice move (up) this year so far," said Ken Polcari, managing director at ICAP Equities in New York. "Guidance is cautious so people are taking money off the table."

The results sparked a selloff in other bank shares. An S&P financial index .GSPF, down 1.4 percent, represented the worst performer of the S&P 500's top 10 sectors. The KBW Bank index .BKX lost 2.5 percent.

Polcari said the low volume that came with this week's decline indicated this was not a sign of panic. Since hitting a near five-year intraday high of 1,474.51 on September 14, the benchmark S&P 500 Index has fallen 3.1 percent.

"If we keep getting negative reports, selling will pick up," he said.

Expectations are low for S&P 500 companies' results. Quarterly earnings are forecast to fall 3 percent from a year ago, compared with a 2.1 percent drop estimated at the start of the month, according to Thomson Reuters data.

The Dow Jones industrial average .DJI edged up 2.46 points, or 0.02 percent, to 13,328.85 at the close. But the S&P 500 .SPX fell 4.25 points, or 0.30 percent, to finish at 1,428.59. The Nasdaq Composite .IXIC dipped 5.30 points, or 0.17 percent, to 3,044.11.

The S&P 500 closed right above its 50-day moving average, barely enough to avoid going into the weekend with a technical red flag hanging over the market.

Despite several encouraging data points this week, the benchmark S&P 500 fell 2.2 percent - its worst weekly performance since the week ended June 1.

Shares of Workday Inc (WDAY.N), a cloud computing company that has yet to turn a profit, soared nearly 74 percent to $48.69 in their market debut, driving some tech analysts to question the lofty valuation.

Advanced Micro Devices Inc (AMD.N) fell 14.4 percent to $2.74 a day after the chipmaker said its third-quarter revenue probably fell 10 percent from the previous quarter as a weak global economy and a growing preference for tablets slams the PC industry.

About 5.5 billion shares changed hands on the New York Stock Exchange, the Nasdaq and NYSE MKT, below the daily average so far this year of about 6.52 billion shares.

On the NYSE, about seven issues fell for every four that rose. On the Nasdaq, almost two issues fell for every one that advanced.

Earlier in the session, the market was supported by Thomson Reuters-University of Michigan data showing U.S. consumer sentiment unexpectedly rose to its highest in five years in October, in the latest in a string of encouraging signs about the economy.

(Reporting by Rodrigo Campos; Editing by Jan Paschal)

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