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Stocks opened lower on Wednesday, putting the S&P 500 on track for a third consecutive decline, as investors remained on edge given the lack of details on U.S. budget, or so-called fiscal cliff, talks.
The Dow Jones industrial average dropped 53.22 points, or 0.41 percent, to 12,824.91. The Standard & Poor's 500 Index dropped 7.44 points, or 0.53 percent, to 1,391.50. The Nasdaq Composite Index dropped 15.70 points, or 0.53 percent, to 2,952.09.?
Stocks fell on Tuesday after Senate Majority Leader Harry Reid said he was frustrated by the lack of progress in budget talks. Broad tax increases and government spending cuts take effect Jan. 1 unless there's a deal.
Elsewhere Wednesday, stocks are lower in Asia and Europe.?
Investors will get readings on new-home sales and the Federal Reserve's Beige Book view of the state of the economy later on Wednesday, but the market is mainly focused on the negotiations about long-term budget deficit reduction.
President Barack Obama has invited to the White House chief executives from top corporations, including Goldman Sachs , Deloitte LLP, and Caterpillar Inc , to discuss U.S. fiscal problems.
Obama's meeting with influential leaders from the corporate world is part of his push for Congress to extend tax cuts for middle income Americans, one flashpoint in a standoff with Republicans in Congress over a series of tax hikes and spending cuts, dubbed the "fiscal cliff," that will go into effect next year if lawmakers and the president cannot come up with a deal to stop them.
"These CEOs know that the market will sell off without any resolution, so I think it's encouraging that they are meeting with the president," said Sal Arnuk, co-founder at Themis Trading at Chatham, New Jersey.
One possible result of the deficit reduction talks is a rise in the tax rate on dividends, prompting some firms to issue special dividends or move up plans for dividends.
The latest example is retailer Costco Wholesale Corp , which said it will pay a special $3 billion dividend to investors. The company posted monthly same-store sales that beat forecasts.?
Deep divisions at the Federal Reserve were on display on Tuesday, just two weeks before the U.S. central bank's next policy-setting meeting, with one top Fed official pushing for more easing, and another advocating limits. The Fed will release its Beige Book summary of regional economic conditions at 2 p.m.
Reuters and The Associated Press contributed to this report.
Source: http://www.nbcnews.com/business/fiscal-cliff-worries-push-stocks-lower-open-1C7301602
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