The S&P 500 hovered near flat on Thursday as investors awaited news of a potential deal to avert the fiscal cliff. Trading volume was light during the holiday week, contributing to the market’s lack of movement.

Fiscal Cliff Negotiations in Focus

All eyes are on Washington as lawmakers attempt to reach a compromise before the end of the year. Failure to do so could trigger a series of tax hikes and spending cuts that economists fear could push the U.S. economy back into recession.

Key Areas of Disagreement

Negotiations have stalled over several key issues, including:

• The level of tax increases for wealthy Americans
• The extent of spending cuts to government programs
• The duration of any temporary agreement

Market Impact

The uncertainty surrounding the fiscal cliff has weighed on investor sentiment in recent weeks. A resolution is widely seen as necessary to sustain the current economic recovery.