Stocks drop as fiscal cliff deadline looms
US stocks opened lower on the last day of the year Monday as Washington politicians appeared still far from a deal hours before the deadline to avoid the economy-crunching fiscal cliff.
Five minutes into trade the Dow Jones Industrial Average was off 33.18 points (0.26 percent) at 12,904.93.
The broad-market S&P 500 fell 2.42 (0.17 percent) to 1,400.01, while the tech-rich Nasdaq Composite shed 0.51 points (0.02 percent) at 2,959.80.
After a weekend in which Washington leaders failed to find a last-minute compromise on a fiscal deficit reduction plan, the cliff’s mix of steep automatic spending hikes and tax cuts was almost certain to begin taking effect at midnight, pushing the country toward recession.
“Stocks are close to pricing in a lot of this political failure and brinkmanship. If no last-minute deals are cobbled together, this last day of the year will likely bring another round of selling,” said Kevin Cook of online broker Zacks.
“But since a new playing field with new incentives exists on the other side of tonight’s cliff, the chances to prevent a recession are numerous, manageable, and conceivable.”