Stocks get the jitters as fiscal cliff worries mount

House Speaker Boehner cancels vote on 'Plan B' amid resistance from his own party.

By Jonathan Berr Dec 21, 2012 10:09AM
Arrows and Lights © DAJ, amana images, Getty ImagesUpdated 2:10 p.m. ET

When House Speaker John Boehner canceled a vote on his "Plan B" to address the fiscal cliff after meeting stiff resistance from his own party, you didn't have to be Warren Buffett to guess how Wall Street would take this news: badly.

The market was all over the place Friday as investors pondered how to respond. The Dow Jones industrials ($INDU) dropped quickly at the open, recovered slightly and by the afternoon traded down about 1%. The Standard & Poor's 500 Index ($INX) was also down about 1%, and the Nasdaq-100 Index ($NDX) fell about 1.3%.

Bank of America (BAC) and Walt Disney (DIS) were some of the big market losers Friday, seeing respective drops of 2.1% and 1.9%.

That the market didn't drop further was surprising, considering how much investors are worried about the $600 billion mix of tax hikes and government spending cuts set to take effect at the end of the year unless Congress takes action. That's looking less and less likely, considering that Boehner dismissed the House for the Christmas holiday, leaving even less time to craft a deal.

Still, Boehner said he will continue working with President Obama to find a solution. He has little choice. Meanwhile, every passing day with no deal increases the chances that the country will head off the fiscal cliff on Jan. 1.

"The two sides seem to be about as far apart as ever," John Carey, executive vice president at Pioneer Investments, told The Wall Street Journal. "From all the public information, it looks like an impasse, so we'll probably be in for some turbulence."

Sadly, Washington is as dysfunctional as ever.

--Follow Jonathan Berr on Twitter @jdberr
 

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6Comments
GUSTAVO URENA
Dec 21, 2012 7:29PM
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The GOP + TEA PARTY + NRA  = NAZI party.


LostOnEarth
Dec 21, 2012 3:42PM
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The GOP is collapsing!

 

Republican Retards, Teabagger Turds and Libertarian Lunatics arguing amongst themselves!

 

The Stock Market is crashing!

 

The Mayans we're right, Republican Armageddon has arrived and their pathetic lives are being destroyed,..... by themselves. LMAO

 

Boehner with an 11% approval rating!

 

LIFE JUST KEEPS GETTING BETTER! ;-)

 

Chris Van Hollen & Elizabeth Warren in 2016 & 2020!

 

MERRY CHRISTMAS AND GOD BLESS AMERICA!

indycrat
Dec 21, 2012 3:01PM
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It's "buddyclowntime" please put your right hand up and begin to wave as this will be the last time you see the republican party in tact. In no way is the president responsible for the actions of the opposing party. How are you supposed to negotiate with the inmates at the insane asylum? Even the warden at the nut house can't keep the patients in check. That sound you just heard was the republicans flushing the middle class down the toilet. You are the very sheep who support republican ideas who spew about the "wool" being pulled over the dems eyes. Let the DARK AGES begin for republicans and this will be a continuous slide for atleast a decade.

Buddyboy57
Dec 21, 2012 2:17PM
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I know the Republicans are a pain in the back-side, but so are the Democrats.  Ultimately, it's up to the President to put this all together.  He's the man on top, he's the guy that wanted the job, this is his responsibility.  He'd better get his act together, and for once , quit blaming everyone else.  
clownfeet
Dec 21, 2012 12:26PM
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Why not just fix the economy?If the gov. would pay all the people unemployed say fourteen million of them, 800 dollars each week tax free, for two years it would cost 1,164,800,000,000 dollars. This would, stimulate the economy, boost manufacturing, create jobs and increase tax revenue. It could, lift real estate markets and help to increase , construction jobs. This would save money, by stopping all food stamps for these people, and unemployment money Also, it could reduce the amounts they pay in food stamps and other help later, If they were to apply, for this in the future, through means testing them at that time ! allow them to find work, as they collect this money, but, pay regular taxes on any money earned. This would create more tax revenue, This would strengthen the middle class workers, while saving Federal and States money; As it makes the base of our economy stronger. Also, if they take 20% from the 800 dollars from the top and give it to the states every week, it would be 2,240,000,000 dollars each week going to states,to help them balance their budget deficits and hire workers. This would create more good paying jobs and stimulate business. Also, it would create more tax revenues and this all would help to fund, SS and Medicare. Being optimistic, I think it would bring the GDP numbers up to around 7 or 8 %, during this time.The government, would have a better environment to cut waste and spending during these two years. Also, It could save the gov. money , when the health care goes into effect because, at that time many would be able to pay more for their health care. There are other benefits in this plan not mentioned, but this would get the country back on track, and it would more then pay for itself.

T o pay down the budget deficit! They should also have the banks, corporations, oil, big business and millionaires, and billionaires pay cash money on a sliding scale to pay on the budget deficit!

next time up
Dec 21, 2012 10:53AM
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Sometimes it is best to sit, watch, and learn.  Most folks were yearning for a giant bull run once the budget drama was dissolved.  But hey ever try and get a politician off a stage.  So lets return to the fundamentals we all know to be true.  The American worker is being forced to compete with one arm behind his back.  The unfair trade argument should now be best applied to the American worker.  The International Corporations are hooked up with the necessary politics to completely bury and destroy any workers groups ability to stand up against both political houses and the executive branch of our Government which is being led and supported by organized business.  As in the Vietnam war the US guberment would not allow the American kids to shoot West into Cambodia where the enemy would rest, restock, and regroup.  And Obama just like Clinton was able to completely pull the wool over the American middle class convincing them he had their best interests at heart all the while rubber stamping the New World Order.  Why just yesterday Obama granted most favored nations exemption to Russia.  With the huge uphill run required for most Americans to just survive the powers at be continue, with Obamas blessing, allowing foreign products free access to have their way with the American worker.   We have been hugely misled by this Administration but most here already knew that.  So most of us clearly understand the present goal is to force the American worker to submit without recourse to the Corporatism now controlling the worlds jobs.  I am not or ever could be accepting of many Union excesses.  However we need to remember Capitalism works when two sides fairly compete with the goal of the betterment of all.  We do NOT have that in America at this point in time.  And without free competition we all know Capitalism does not work.  This currency, this market, and this Country are doomed without the proper "competitive" policies fostering a balance between worker and employer in place.  JMHO
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