Stocks have shot up over the last few days as investors and traders gain confidence in the possibility that a solution to the fiscal cliff will be reached by the end of the year. But that optimism is waning today as the White House and Republican House Leader John Boehner continue to trade salvos in the ongoing negotiation process.
Despite the continued deadlock, the respective sides are moving closer to a consensus. On Sunday, Boehner said he was willing to increase the tax rate on Americans making more than $1 million per year. President Obama had originally sought an increase on earners making more than $250,000, but in response to Boehner's offer, he raised his threshold to $400,000. By today, however, the negotiations have purportedly ground to a halt, leaving many to wonder if they'll be completed in time.
According to a market analyst quoted by Bloomberg News: "In theory, an agreement could be reached and signed into law after Christmas, but that's unlikely. There's simply not enough time to iron out the details."
It's for this reason that stocks are down broadly today. As of 2:40 p.m. EST, the Dow Jones Industrial Average (^DJI 0.16%) is down 48 points, or 0.36%. All but eight of its 30 component stocks are in the red.
Leading the blue-chip index lower are economic bellwethers Alcoa (AA +0.00%) and General Electric (GE +0.80%), down about 3% each in intraday trading. As my colleague Dan Caplinger noted earlier, the aluminum giant is suffering after it was reported that bond-rating agency Moody's might downgrade the company's credit rating to "junk." With respect to GE, meanwhile, rumors continue to circulate about its potential purchase of aerospace company Avio.
Heading up, alternatively, are shares of United Technologies (UTX 2.81%) and Intel (INTC +23.33%). As fellow Fool Dan Dzombak observed, United Technologies is higher following the relatively good news about housing starts' continuing strength, as "the company's fire and security division, as well as its carrier division, which makes HVAC products, will benefit from a rising housing market." And Intel shares are merely continuing a recent rally following an otherwise disappointing year.
