US stocks sink on 'fiscal cliff' concerns
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NEW YORK, Dec 21 AFP
December 22 2012, 09:36AM
US stocks have sunk in the absence of a deal to avert the looming "fiscal cliff" crisis just days before a deadline.
The Dow Jones Industrial Average ended Friday's session down 120.88 points (0.91 per cent) at 13,190.84.
The broad-market S&P 500 fell 13.54 points (0.94 per cent) to 1,430.15, while the tech-rich Nasdaq Composite dipped 29.38 points (0.96 per cent) to 3,021.01.
Washington has until the end of the year to stop the US going over the so-called fiscal cliff, a mix of tax increases and spending cuts that experts say could drag the world's biggest economy into recession if they go into effect on January 1.
A Republican plan to let tax breaks expire for US millionaires collapsed late on Thursday when it failed to earn enough party support, leaving talks in limbo.
Republican leaders said they were not walking away from talks but a compromise remains elusive.
The cancellation of a vote on the Republican plan in the House of Representatives due to lagging support "provided the lion's share of the negative sentiment, even as (House) Speaker (John) Boehner left the door open for further negotiations with President Obama," said Charles Schwab analysts.
Concern about the fiscal cliff appeared to overshadow new, positive economic data, including a rise in consumer spending, the key driver of the US economy.
Personal spending climbed 0.4 per cent while personal income rose 0.6 per cent, the Commerce Department said.
Stocks in media conglomerate News Corp, which said it had filed a document with US regulators detailing its split into two independent companies, lost 1.9 per cent.
Bond prices rose, with the 10-year US Treasury yield falling to 1.75 per cent from 1.80 per cent late on Thursday and the 30-year dipping to 2.92 from 2.98. Bond prices and yields move inversely.