Stocks Open Sharply Lower After GOP Cancels Vote

New York Stock exchangeNEW YORK (AP) - Stocks opened sharply lower Friday on Wall Street after House Republicans called off a vote on tax rates and left federal budget talks in disarray 10 days before sweeping tax increases and government spending cuts take effect.

The Dow Jones industrial average fell 140 points to 13,171 in the opening minutes of trading, a decline of 1 percent. The Standard & Poor's 500 index fell 15 points to 1,428. The Nasdaq composite index fell 52 to 2,997.

The House bill would have raised taxes on Americans making at least $1 million per year and locked in decade-old tax cuts for Americans making less. Taxes will rise for almost all Americans on Jan. 1 unless Congress acts.

House Speaker John Boehner had presented what he called Plan B while he negotiated with the White House on avoiding the sweeping tax increases and spending cuts, a combination known as the "fiscal cliff."

But Boehner scrapped a vote on Plan B on Thursday night after it became clear that it did not have enough support in the Republican-led House to secure passage. He called on the White House and the Democratic-led Senate to work something out.

The House will not meet again until after Christmas, if then.

Technology stocks were among the hardest hit Friday in early trading. Tech stocks in the S&P 500 were down 1.5 percent as a group. Apple, the most valuable company in the country, fell $10.04, or 2 percent, to $511.69.

It was not the first time that Wall Street expressed worry about "fiscal cliff" talks.

On the day after the election, when voters returned divided government to power, the Dow dropped 312 points. On Nov. 14, when President Barack Obama insisted on higher tax rates for the wealthy, the Dow dropped 185 points.

Stocks closed sharply lower Friday in Asia after House Republicans canceled their vote. The Nikkei index in Japan fell almost 1 percent, and Hong Kong's Hang Seng Index dropped 0.7 percent. Stocks were also lower in Europe.

In the bond market, the yield on the benchmark 10-year U.S. Treasury note fell 0.06 percentage point to 1.74 percent, an indication that investors were moving money out of stocks and into safer government bonds.

The price of oil fell $2.02, or 2.2 percent, to $88.12 per barrel.

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We the people are burning mad that the representatives we have elected are not doing the job. 97% of the population want this resolved and the high income earners to pay their fair share and get this budget working for the country. Don't let an elite group of Tea Party /special interest groups stop this country from moving ahead with growth and prosperity for all citizens. The greed of these special interest groups is disgusting. Get the job done for us NOW!!!

December 21 2012 at 1:21 PM Report abuse rate up rate down Reply

John Boehner got 98% of what he wanted with the fiscal cliff, it's his baby.

December 21 2012 at 12:44 PM Report abuse rate up rate down Reply

the democrats need to support the bill that taxes people making over a million. fiscal cliff avoided and everyone can get ready to find spending cuts next year.

December 21 2012 at 11:50 AM Report abuse -1 rate up rate down Reply

Now the ball is in Obama and Reids court.... its time for them to come up with an idea... If not come January 1st everyone's taxes will go up and all government spending will begin to be cut....

1 Trillion equals, 1,000 billion..... so when Obama talkes about cutting spending by 1 Trillion over 10 years, that is little to nothing....compaired to the size of the problem that is growing by 4 billion dollars each and ever day.

December 21 2012 at 11:38 AM Report abuse +1 rate up rate down Reply
2 replies to bchrist751's comment

Boehner said he got 98% of what he wanted. The ball is squarely in the GOPs court.

December 21 2012 at 12:45 PM Report abuse -1 rate up rate down Reply

The Senate passed a bill retaining the Bush Tax cuts on income under $250,000 but the House Republicans have refused to pass it even though a majority of Americans are for it. Obama has already given in too much.

December 21 2012 at 12:54 PM Report abuse rate up rate down Reply

I am curious why the speaker did not "check this out" before hand.

December 21 2012 at 11:22 AM Report abuse +1 rate up rate down Reply

It's about time that the public realizes tht this is really Obama's problem and not the Republican's. He has shown no leadership whatsoever.

December 21 2012 at 10:54 AM Report abuse -1 rate up rate down Reply
1 reply to oilmlh's comment

I suspect the House will reconvene after Christmas and pass a budget that reduces spending growth, and retains the previous tax cuts, putting the Senate and Obama in a position to either pass it or take responsibility for not passing it.

December 21 2012 at 11:07 AM Report abuse rate up rate down Reply