Since Republicans and Democrats can't seem to agree on anything right now, yesterday John Boehner announced that he would move to "Plan B," which would extend the Bush-era tax cuts on all Americans except those earning more than $1 million per year. The White House has made clear that it would not agree to such a deal. Most market participants believe that precious time is being wasted and that Washington may not come up with a solution. Additionally, the Fitch rating agency warned the U.S. today that if a solution to the fiscal cliff is not agreed upon, the country may lose its "AAA" rating.
And therefore the Dow Jones Industrial Average (DJINDICES:^DJI) has broken its two-day, 200-point rally and is edging lower. As of 12:50 p.m. EST, the Dow is down a nominal 6.5 points, or 0.05%, to 13,345. Nineteen of the Dow's 30 components are in the red. Three of the biggest losers are General Electric (NYSE:GE), Alcoa (NYSE:AA), and American Express (NYSE:AXP).
Why are they down?
For the second day in a row, shares of General Electric are trading down more than 2%. Midway through yesterday's session, the stock was down 2.1%, and at the midpoint today, shares are down about 2.7%. Yesterday the company reduced 2012 guidance for revenue growth at its industrial business by 2%. It also forecast overall growth of 3% for this year and 0% to 5% for 2013. GE has has struggled to grow over the past few years and would take a major hit if the economy fell off the cliff.
Shares of Alcoa are trading lower by 3% today. The drop comes after ratings agency Moody's put the company on watch yesterday. The aluminum producer may see its credit rating fall to "junk" status if Moody's downgrades the company. Moody's said the reason for the possible downgrade was the decline in the price of aluminum over the past year. The metal is down nearly 22%.
Shares of American Express are down 1% today on news that the White House has approached the company's chief executive officer, Kenneth Chenault, about becoming a member of the President's administration. According to people familiar with the matter, President Obama may want Chenault to become the Treasury secretary. This would be a great move for both Chenault and the country, but it would undeniably hurt American Express and its shareholders.
Fool contributor Matt Thalman has no positions in the stocks mentioned above. The Motley Fool owns shares of General Electric Company. Motley Fool newsletter services recommend American Express Company. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.