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Overnight Markets: U.S. stocks declines as budget talks falter

by Himanshu Singh on Dec 20, 2012 at 03:42

Overnight Markets: U.S. stocks declines as budget talks falter

Wall Street declined on Wednesday as deteriorating federal budget discussions stoked fears that automatic tax increases and spending cuts will be triggered.

The Dow Jones industrial average dropped 99 points, or 0.74%, to 13,252. The S&P 500 lost 11 points, or 0.76%, to 1,436. The Nasdaq Composite fell 10 points, or 0.33%, to 3,044.

House Speaker John Boehner, the top Republican in Congress, has said that his chamber will pass a proposal that Obama had already threatened to veto as it spares many wealthy Americans from tax increases needed to balance the budget.

Health care and consumer staples led the declines. Herbalife Ltd tumbled 12.1% after William Ackman, one of the world's biggest hedge fund managers, said he is shorting the stock of the weight management products company.

Economic data showed, housing starts in the U.S. fell 3% to a 861,000 annual rate from a revised 888,000 annual pace in October, the Commerce Department reported.

Alcoa Inc. fell 3% as Moody’s Investors Service placed the aluminum producer’s credit rating under review for a downgrade.

General Electric Co. slipped 3.1%, while AT&T Inc., the largest U.S. telephone company, decreased 1.3%.

In contrast, General Motors surged 6.6% after the automaker said it will buy back 200 million of its shares from the U.S. Treasury.

Oracle jumped 3.7% after the company reported earnings that beat expectations on strong software sales growth.

Knight Capital Group Inc climbed 5.4% after it agreed to be bought by Getco Holdings in a deal valued at $1.4 billion.

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