On Wall Street, stock indices slightly fell in quiet trading on Tuesday, as investors monitor negotiations between Republicans and Democrats in Washington regarding the reduction of the budget deficit to avoid the ‘fiscal cliff’.
The Dow Jones index weakened by 13 points, or 0.11 percent, to 12,951 points, while the S&P 500 slipped 0.17 percent to 1,407 points, and the Nasdaq index fell 0.18 percent to 2,996 points.
Trading was very calm yesterday as there was no progress in the negotiations regarding the reduction of the budget deficit, and the automatic reduction of budget expenditures and tax increases still threaten, which could push the U.S. economy into recession next year.
Republicans proposed to reduce the deficit by cutting budget expenditures on a range of social programs and increasing revenue by closing some tax loopholes, while President Barack Obama dismissed the Republicans’ proposals and stated that any eventual agreement must include tax increases for wealthier Americans.
– Even after a series of political statements, investors still do not know whether these are real negotiations or just political posturing – says Bernard Baumohl, director at the Economic Outlook Group. Nevertheless, many investors expect that some sort of, at least temporary, agreement will be reached by the end of the year.
