US stocks drop as 'cliff' deadline looms
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NEW YORK, Dec 31 AFP
January 01 2013, 01:52AM
US stocks have opened lower on the last day of the year as Washington politicians appeared still far from a deal hours before the deadline to avoid the fiscal cliff.
Five minutes into trade on Monday the Dow Jones Industrial Average was off 33.18 points, or 0.26 per cent, at 12,904.93.
The broad-market S&P 500 fell 2.42 points, or 0.17 per cent, to 1,400.01.
The tech-rich Nasdaq Composite shed 0.51 points, or 0.02 per cent, 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."