MARKET REPORT

Stocks slip as budget talks drag

— Stocks dipped Wednesday, recording their first loss of the week.

General Motors stock surged after the government announced plans to sell its ownership stake in the company.

The Dow Jones industrial average closed down 98.99 points, or 0.7 percent, at 13,251.97. The Standard & Poor’s 500 index dropped 10.98 points, or 0.8 percent, to 1,435.81. The Nasdaq composite index fell 10.17, or 0.3 percent, to 3,044.36.

Falling stocks narrowly outnumbered rising ones on the New York Stock Exchange. Consolidated volume was a below average 3.8 billion shares.

President Barack Obama said Wednesday that he and House Speaker John Boehner were “pretty close” to a dealto avoid the tax increases and spending cuts, a combination known as the “fiscal cliff.” The two sides have exchanged proposals this week.

But the president also said that congressional Republicans keep finding “ways to say no as opposed to finding ways to say yes.” He said the nation deserves compromise in the aftermath of the Connecticut school shooting.

Boehner, speaking to reporters for less than a minute and in a defiant tone, called on Obama to offer a deficit-cutting plan balanced between spending cuts and tax increases.

He predicted that the House would pass his backup plan, which calls for extending decade-old tax cuts for Americans making less than $1 million per year. The White House has rejected that plan.

The negotiations have moved the stock market for weeks now as traders react to the daily back-and-forth.

The S&P 500 index had gained more than 2 percent over the previous two days in part because of optimism about a deal taking shape. The optimism seemed to melt on Wednesday, and stocks finished near their lows for the day.

GM shares rose $1.69, or 6.6 percent, to $27.18 after the company said it would spend $5.5 billion to buy 200 million shares of its own stock back from the federal government.

The government pledged to sell the other 300 million GM shares it owns on the open market and shed its entire ownership stake in 12-15 months. The government got GM stock as part of a 2009 bailout.

U.S. builders broke groundon fewer homes in November after starting work in October at the fastest pace in four years. Hurricane Sandy probably distorted the totals in the Northeast.

Materials stocks fell just 0.5 percent, less than the rest of the market. Industrials fell 0.7 percent. Elsewhere on Wall Street, telecommunications stocks and health-care stocks fared the worst, down 1.2 percent and 1.1 percent respectively.

Oracle, which makes software for businesses, jumped $1.21, or 3.7 percent, to $34.09 after reporting stronger earnings as companies splurged on software and other technology.

The yield on the benchmark 10-year U.S. Treasury note fell 0.02 percentage point to 1.80 percent. The price of oil climbed $1.58, or 1.8 percent, to $89.51 per barrel.

Business, Pages 26 on 12/20/2012

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