Markets sank after House Speaker John Boehner's "Plan B" tax vote was called off last night after members of his own party broke ranks and voted against it. The Republican bill would have raised taxes on incomes over $1 million per year. The White House slammed the proposal for not reducing the deficit enough and the complementary Spending Reduction bill for eliminating popular social programs such as Meals on Wheels.
"The House did not take up the tax measure today because it did not have sufficient support from our members to pass," Boehner said in a statement last night. "Now it is up to the president to work with Senator Reid on legislation to avert the fiscal cliff. The House has already passed legislation to stop all of the January 1 tax rate increases and replace the sequester with responsible spending cuts that will begin to address our nation's crippling debt. The Senate must now act."
The concern is that if House Republicans were unwilling to stand for tax rate increases on millionaires even for strategic purposes, they are probably not going to pass anything that the president will sign. Boehner will hold a press conference on the matter today at 10:00 a.m.
Global markets sold off after the vote was cancelled. Before the opening bell, Dow
(INDEXDJX:.DJI) futures were down 1.33% at 13,090. Futures contracts on the S&P 500
(INDEXSP:.INX) fell 1.40% to 1,420.80 and Nasdaq
(INDEXNASDAQ:.IXIC) futures fell 1.54% to 2,648.50.
Today, the government reported that durable goods orders rose 0.7% in November after gaining 1.1% in October. Personal income in November rose 0.6%, beating estimates of 0.3%. Consumer spending rose 0.4%
A report on consumer sentiment this month will be released later this morning. The consensus estimate is that the index rose by half a point to 75.
Shares of Research In Motion
(NASDAQ:RIMM), the maker of the BlackBerry, fell 12.75% in the pre-market after it reported a loss of $0.22 per share. Revenue was down 47% from last year at $2.73 billion, but this beat expectations. The Canadian company also settled its patent litigation with Nokia
(NYSE:NOK ) with a one-time payment and ongoing payments. Nokia sued Research In Motion for a breach of contract.
(NYSE:FB) caved to its users' negative feedback and cancelled the changes to its terms of service. Language in the terms of service at least appeared to suggest that the photo sharing app might sell users' photos for advertising purposes without their consent. CEO Kevin Systrom wrote on the company's blog, "Instagram has no intention of selling your photos, and we never did. We don't own your photos -- you do.
(NASDAQ:ADBE) announced that it is acquiring Behance, a site for sharing digital artwork. The acquisition will add social features to the Photoshop maker's Creative Cloud service.
Today is a quadruple witching day. Futures and options contracts on stock index futures and single stocks expire today.
No positions in stocks mentioned.
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