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Morning Market Movers: What’s Going on with Markets (and What Did That Cancelled ‘Plan B’ Vote Do?)

Dec. 21, 2012 10:14am Becket Adams

Here’s what’s shaking

U.S. Consumer Spending:

Morning Market Movers: Whats Going on with Markets (and What Did That Cancelled Plan B Vote do?)

(Getty Images)

The Commerce Department says consumer spending rose 0.4 percent compared with October. Personal income jumped 0.6 percent, the biggest gain in 11 months.

Wages and salaries rose $41.1 billion in November. Sandy had reduced wages at an annual rate of $18.2 billion in October. Spending had fallen 0.1 percent in October compared with September.

With income rising faster than spending, the saving rate rose to 3.6 percent of income in November, up from 3.4 percent in October.

Consumer spending is closely watched because it accounts for about 70 percent of economic activity.

DURABLE GOODS:

(Getty Images)

The Commerce Department reported Friday that orders for durable goods rose a seasonally adjusted 0.7 percent in November, compared to October, when orders had risen 1.1 percent.

Orders for core capital goods – considered a proxy for business investment – rose 2.7 percent in November after a revised 3.2 percent gain in October, which was the biggest increase in 10 months. The two big gains came after a period of weakness in this category had raised concerns about flagging business investment, a driving force in this recovery.

The gains were widespread in November, with only demand for commercial aircraft showing a big decline.

Total orders for transportation equipment dropped 1.1 percent, reflecting a 13.9 percent drop in orders for commercial aircraft, which offset a 3.5 percent rise in demand for motor vehicles and parts.

Excluding transportation, orders for nondurable goods, items expected to last at least three years, rose to $220.9 billion and are up 7.3 percent so far this year.

GENERAL ELECTRIC:

(Getty Images)

Industrial conglomerate General Electric plans to buy the aviation business of Italian manufacturer Avio for $4.3 billion to grow its jet propulsion business and strengthen its supply chain.

The Fairfield, Conn., company said Friday that it wants to build its supply chain as it ramps up engine production. The deal also gives GE a chance to offer Avio products outside the aviation industry, in power generation, oil and marine products.

GE will buy Avio S.p.A.’s aviation business from European private equity firm Cinven and the Italian aerospace group Finmeccanica.

–

As of this writing, oil and U.S. stocks are falling — fast:

U.S. FUTURES:

(Getty Images)

U.S. stock futures are moving sharply lower after GOP leaders unexpectedly postponed a vote on legislation that would raise taxes on wealthier Americans, bringing the country closer to the so-called “fiscal cliff.”

Dow Jones industrial futures are down 163 points to 13,104. The broader S&P futures have given up 19 points to 1,421.60. Nasdaq futures are down 34.50 points to 2,665.50.

House Speaker John Boehner conceded late Thursday that there were not enough votes from GOP lawmakers for his plan that would have allowed higher tax rates for loftier income ranges.

That went against a hardline pledge from House Republicans to prevent any such increase.

If no deal is reached, tax hikes will occur at the start of the year along with deep spending cuts, which could trigger a recession.

OIL:

(Getty Images)

Oil prices fell to near $89 a barrel Friday as doubts intensified over whether political leaders in Washington would be able to reach a deal on the budget before a package of tax hikes and spending cuts automatically kicks in with the new year.

By early afternoon in Europe, benchmark crude for February delivery was down $1.08 to $89.05 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose 15 cents to end at $90.13 per barrel Thursday on the Nymex.

In London, Brent crude, used to price international varieties of oil, was down 50 cents to $109.52 a barrel.

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The Associated Press contributed to this report.

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Comments (29)

Jowolf
Posted on December 21, 2012 at 11:54am
I read that incomes have risen this past Fall! I had read just prior to this that incomes have fallen. I know our income fell by an additional 2400.00 a year to compensate for Obamacare. Now, gas prices have dropped for no particular or rational reason like there was no rational reason for the tremendous increase. Like many, I am glad I never invested in the stock market because I sense another crash. The taxpayers lost a lot of money on GM….should never bailout private companies. The Middle East is a joke and we are to believe that DEMOCRACY is taking hold there. Let us run off the fiscal cliff…let BO have his way and sit back and watch. All hail Time’s Man of the Year!

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- Unix
  Posted on December 21, 2012 at 1:16pm
  Ya, agreed! All of these numbers are worked to make it all look bearable, if the true numbers would come out there would be panic on the streets!
  
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- December22
  Posted on December 22, 2012 at 7:01am
  Keep your powder (money) dry. I think we are headed for a significant move down in the market the first part of 2013 no matter what happens with the fiscal cliff.
  
  Report this comment
breakobamanow
Posted on December 21, 2012 at 11:31am
I LIKE THE DEPRESSION
I like the depression! No more prosperity for me! I have had more fun since the depression started than I have ever had in my life. I had forgotten how to live and what it was like to have real friends, and what it was like to eat common every day good food.

Fact is I was getting a little too high hat. It’s great just to drop into a store and spend an hour, or two, or three hours, or even half a day visiting and not feel like you’re just wasting valuable time.

I like the depression! I’m getting acquainted with my neighbors I never knew before, and following the biblical admonition to love them. Some of them have been living next to me for three years and now we butcher hogs together.

I like the depression! I haven’t been out to a party in eighteen months and my wife has dropped all of her clubs and I believe we’re falling in love all over again. I’m pretty satisfied with her and I think I’ll keep her.

I’m feeling better since the depression. I get more exercise because I have to walk everywhere I go, and lots of folks that used to drive Cadillac’s; well their walking with me.

I like the depression! I’m getting real honest to good food now; three years ago we ate fillet of sole, crab lei, Swiss steak with flour gravy; we had things called guinea hens and gourmet and oriental: now we eat sow bosom with buttons on it. I like it!

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- breakobamanow
  Posted on December 21, 2012 at 11:34am
  I like the depression! Three years ago I never had time to go to church. I played baseball and checkers every Sunday all day; and besides that there wasn’t a preacher in Texas that could tell me anything. Now, I go to church regularly every Sunday; I never miss a Sunday: and if this depression keeps on I’ll probably start attending Wednesday night prayer meetings. Oh Yes! I like the depression.
  
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- breakobamanow
  Posted on December 21, 2012 at 11:41am
  Credit for this story goes to Sally Wahl’s father who died years after the depression had ended and she found this piece in some of his personal effects. God has a way of turning what we view as being bad into something good.
  
  Report this comment
- breakobamanow
  Posted on December 21, 2012 at 11:53am
  Stop complainig and start thanking God that he sent his only begotten Son into the world to die for your sorry no good butt, and instead of looking at everything as bad; bless God: because he has a better way. Be content with the things you have and give all the glory to God that you have that. He could have already sent your soul to hell, but he is long-suffering and merciful. I hope this wakes some people up to what is really going on. I love you, and hope God blesses every one of you.
  
  Report this comment
- Unix
  Posted on December 21, 2012 at 12:12pm
  Good post BreakObamaNow…I am facing bankruptcy and foreclosure in the not too distant future. Just got a hospital bill for my daughter of over $36K, but $27K was written off, we have no insurance, but by the grace of God the bill is $9K…how will I pay that off, I have no idea. I work three jobs, and am spending that last of my 401k and savings just to stay afloat, maybe until May…but time is ticking, and still no full time job for me. At my age 50′s, not a lot of folks are beating down my door to hire me. Having said all of that, I give thanks to God for all he gives me, I pray every day, I am a sinner, but life is about to get MUCH simpler for me real soon. We need this like a hole in the head, right? I think things are about to come to a head real soon; the economy will tank under the strain of $180 trillion total debt at some point (private, public and unfunded liabilities, derivatives, foreclosures, foodstamps/welfare gone wild, gimme gimme gimme mentality, hoodlums, couple of wars, etc), gun debate = new draconian laws and may confiscation. Who knows, even martial law could be called soon! The air smells a lot like 1861 again, and I hope and pray we do not reach that point!
  
  God Bless you all, and America, yet I know ye not any more!?
  
  Report this comment
- breakobamanow
  Posted on December 21, 2012 at 5:45pm
  @UNIX, I’m sorry to hear your in such a state. I’m praying for you and if you need inspiration just read all the things Job went through. Even his wife encouraged him to curse God and die and he would not. God has a reason for everything. There is a blessing in all he does. Turn your heart to him. Turn all your worries and cares of this world over to him. Especially the ones you can’t control. Let your heart not be troubled.
  John 14:27
  Peace I leave with you, my peace I give unto you: not as the world giveth, give I unto you. Let not your heart be troubled, neither let it be afraid.
  Proverbs 3:5
  Trust in the LORD with all thine heart; and lean not unto thine own understanding.
  Proverbs 29:25
  The fear of man bringeth a snare: but whoso putteth his trust in the LORD shall be safe.
  God bless you.
  
  Report this comment
- breakobamanow
  Posted on December 21, 2012 at 6:02pm
  UNIX I went back and re-read your post after saying a prayer for you and your family. You have a lot to be thankful for. Three jobs is a lot considering many people do’t have even one. You have a daughter, and if you read your bible you know what a blessing children are. I have three myself. The LORD giveth and the LORD taketh away and when he closes one door he usally opens another with something better behind it. It depends on how you view it. Instead of being humanly minded we need to be heavenly minded. Like the guy in the story. He could have easly turned it around and wrote how terrible everything was and how there was no money, and how his shoes were worn out and he couldn’t afford new ones and he didn’t know how he was going to make it in this God forsaken world; but he didn’t because he was heavenly minded and saw the blessings in the situation that he didn’t have when things were supposedly good! Open your eyes and look at what the LORD is doing in your life that you can be thankful for and thank him always. A-men?
  
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Walkabout
Posted on December 21, 2012 at 11:29am
“There were probably about 10 posts and, literally, 10,000 words posted in response to my last post, ” -Metoers

***
Yup Meteor’s job is to keep things riled up. Even if they don’t win an argument based on logic if they can tick people off to no end or prevent passionate but detailed & logical discussion than a troll’s work is done. Cha-Ching & Meteor’s is paid another 30 pieces of silver by FAIR or Media Matters.

After all someone who graduated form a top flight university as Meteors claims has get to get paid for spending time here.

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right field
Posted on December 21, 2012 at 11:23am
The lying MSM is 100% responsible for the entire mess. The useful idiots are jumping over the cliff because they are told to jump. Change the narrative and the idiots will respond and take a look around and maybe start to think for themselves and get the truth.
Stop the lies, change the narrative.
The MSM is the problem.

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singray
Posted on December 21, 2012 at 11:21am
The Fiscal Cliff isn’t such a bad thing. Isn’t this what the Left wants anyway. Clinton Era Taxes and Defense Cuts. More like we just sprain an ankle on this one. And don’t you Liberals feel just alittle stupid arguing that something is so bad it caused all that we endure yet want to preserve 98% of that evil thing. Doesn’t it bother you the least bit that you act like the Parent who’s child is never wrong. You know that Bush thing about spending yet ignore it when your guy spends even more. I know the reasoning is your kid is the reason my kid is bullying and beating him.
Sad thing is that you fail to notice the bigger cliff comming. In your desire to make sure your side isn’t wrong you failed to notice that your side might not have backed the car out of the ditch. You are so busy pointing fingers that you haven’t noticed that your side has actually floored the thing. And we race towards that larger cliff at a faster and faster rate. And to be honest with you. We are beyond the braking point now. And just so you know. You are not exempt from the wreckage that will occur. You are in tis car too.

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RaydocX
Posted on December 21, 2012 at 11:14am
Vance, sadly you need to get a little fresh data when you want to demonize the tea party.
Personally, the problem with the tea party is the same as with the Republicans overall… they keep confusing social conservatism with fiscal conservatism… the former is a personal issue and should be a life lived, not a life legislated.

The financial arguments made by the Tea Party are sound and correct and if you cannot see that the policies of BHO and Nancy and Harry are hurting the country, you have truly been drinking the kool aid.

By your vitriol, your anger at the Tea Party is not based on their fiscal point of view, but apparently your concern they will force their God fearing ways upon you… Sort of like minority numbers of atheists are stripping any religious referrence from public displays by an obvious misapplication of the ‘separation’ arguement… it’s not so far a leap to mandatory abortions if women feel embarrassed and stigmatized for having endured something most women haven’t.

But the reason you need not fear your hedonistic life would be impacted is that the Tea Party wants a SMALL GOVERNMENT… Small Government cannot be eyeballing your email and trying to tell you what to think or how to behave. It’s a fallacy that any social issue is on the Republican plank, and THAT hurts the GOP.

Acting like the Tea Party has hurt the GOP is only true to the extent you and more importantly the MSM have demonized them in the eyes of the sheeple.

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RaydocX
Posted on December 21, 2012 at 11:03am
@Vance, you are ignoring the SUPPORT of the ‘fiscal cliff’ by the Dems…
contrary to the avalanche of ‘we have to pass it to know what’s in it’ in the first 2 years of the first term of BHO, which were single party platform based laws, those in the last 2 years required BIPARTISAN support.

you can tell yourself it’s all the Republicans… you can even claim they wanted to ‘put out the fire.’ It doesn’t mean the facts support your statement.

EVERY politician for 20 years has been kicking the can down the road, instead of doing the hard thing. it’s a fallacy of the system, if they do the hard thing they will be out of a job, and politicians want to keep that cozy job with the amazing health care, lunch plan, parking space, office budget, and pension. So right or left their jobs are issue 1 and the rest of us are an after thought.

Sadly, you don’t see or won’t admit that the real fire is the ongoing creation of a welfare state. Check out what’s happening in France, which is less far ahead of us on the socialism scale then i would prefer… the truly rich are bailing from that country, which will further increase the burden on those who are WORKING but paying increasing taxes.

Personally, when my effective tax rate breaches 50% (i’ll even ignore the sales tax everyone pays) any incentive to work harder or longer is gone… i’ll love more time with my family and the Dems will get less revenue to waste because of their core beliefs and the policies

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VanceUppercut
Posted on December 21, 2012 at 10:52am
Hopefully this will be the final straw, and the Republican party will admit that it made a deal with the devil (Tea Party)–or, to steal a line from the Dark Knight, in their desperation they turned to a group of people they didn’t fully understand–and now, like Doc Frankenstein, they can’t control the monster. In 2014 they should refuse any and all support to the Far Right Tea Partiers. Yes, they will take losses in the short-term, but the long-term benefits they will reap from having cut the crazies loose will more than make up for those losses. Now why would I suggest anything that would help the Republicans? Because as a true patriot–rather than the hollow phrase spouting, flag waving, America-fu#*-yeah!’ing morons who call themselves patriots–I would rather see a stronger and SANE Republican party than a weaker, wingnut, dangerous Republican party.

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- Walkabout
  Posted on December 21, 2012 at 11:32am
  “I would rather see a stronger and SANE Republican party than a weaker, wingnut, dangerous Republican party.” -Vance
  
  Wow if that isn’t a lie. It is a hollow phrase to say you want a balanced budget?
  
  In VanceWORLD it is!
  
  Report this comment
- LIBSALWAYSLIE
  Posted on December 22, 2012 at 3:57pm
  VANCE, clearly you are a simpleton. Its amazing how you closed minded left wing morons are wrong, all the time!
  
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VanceUppercut
Posted on December 21, 2012 at 10:42am
I’ll say it again–the Republicans set the barn on fire thinking they would get credit for putting the fire out later on, but now that it looks like the barn is going to burn down completely they’re trying to put the blame on Obama and the Dems. The sequestration deadline was put in place by the Repubs. Yet again the hard-Right of the party has shown that they are willing to drag the country down just to prove a point. First it was the debt ceiling–which, contrary to what most Cons believe, is debt we ALREADY owe. The Tea Partiers were pulling the equivalent of walking into a restaurant, eating a meal, then getting the check and deciding they only wanted to pay for 80% of the meal they just ate. Due to that debacle the country lost it’s AAA+ credit rating. Now the Teartards–in there war against taxes–are willing to allow taxes to go up for EVERYBODY rather than let taxes go up for millionaires. Boehner wasted valuable time on his poorly thought-out Plan B–which he knew from the outset would be vetoed by Obama if it passed–because he wanted to be able to say “Hey, we passed a deal, but Obama shot it down”, but the extremists in his own party shot it down instead. (I bet he cried over it.) If Boehner has any sense at all, he’ll cut a deal with Obama, and hope that along with the Democrats he can pull together enough votes from the moderates on the Right to pass it, leaving the Tea Nuts behind.

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- GoodStuff
  Posted on December 21, 2012 at 10:50am
  Dems control the White House, the Senate, The Treasury…and you’re blaming House Reps?
  
  Leftism truly is a mental disorder.
  
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- RJJinGadsden
  Posted on December 21, 2012 at 10:54am
  VANCEYPOOH, your vision fails to go beyond the tip of your nose. I’d say that both parties are at fault, but also have to remember that its 0bama who has borrowed and spent more money that the previous 43 presidents combined. Then drop back to the Clinton Admin. You know the guy don’t you? Its his tax level that we will go back to next month. That fiscal cliff we keep hearing about. It took a Republican Congress to stop him from massive spending. Then, I admit that the Republicans lost their way shortly after that, and spent the first five and half years of Bush 43′s admin trying to out-Democrat the Democrats when it came to spending. I still say it’s both.
  
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hauschild
Posted on December 21, 2012 at 10:37am
Market down today, then up prior to the new year as the can gets kicked down the road some more.

The shorters are having a field day these days.

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Xiccarph
Posted on December 21, 2012 at 10:32am
Love to know the tricky math they use to calculate these figures. Must be kind of like how they calculate inflation.
My income didn’t rise a penny, in fact it lost buying power from our real 10-12% inflation. Consumer spending went up? Buying what?….Higher priced goods due to inflation over the previous month? Or perhaps, its finding smaller net weights in repackaged goods, but at the same or slightly higher price…you just have to buy more to get the same amount you got before.
Who do these buffoons think they are kidding??

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- hauschild
  Posted on December 21, 2012 at 10:44am
  “Who do these buffoons think they are kidding??”
  
  Well, they’ve managed to snowball well over half of Americans. Not that that necessarily takes much doing these days, but still.
  
  I’m over 30k in taxes thus far in 2012 (fed/state/FICA/Mediscare/Property) and still have 1 pay period remaining. That’s crazy!
  
  My God, that’s more in taxes alone than nearly 4 times the salary of my first year in the service ( I think I made around $8500). It’s also well over my first white collar job in 1997 (think I started at 28k).
  
  I tell ya, the bottom feeders in this country as well as the political elites had better hope guys like me don’t grow tired of playing the game – and quietly stop playing. This entire charade would be over in a heartbeat. Maybe that’s what it will take, though.
  
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- thekuligs
  Posted on December 21, 2012 at 12:00pm
  Xiccarph–my husband and I discuss that a lot. Consumer spending was up .4% but that is likely less than the cost of food went up. (You are right about the package sizes too) For example in Oct I was paying 3.07 for a gallon of milk; now I am paying 3.23 a gallon which is a lot more than .4%
  
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Master.Debater
Posted on December 21, 2012 at 10:27am
Republicans should just accept the fact that the Obamedia is going to blame them for whatever occurs even though it is Obama and the Democrats fault. There is nothing they can do to change that. They might as well stand up for their principles and stand on the side of fiscal responsibility. Otherwise, they might as well switch parties and join the Democrats.

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- VanceUppercut
  Posted on December 21, 2012 at 10:44am
  @Master.Debater
  
  Yes, how dare we blame them for something that is entirely their fault.
  
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- GoodStuff
  Posted on December 21, 2012 at 10:54am
  “Yes, how dare we blame them for something that is entirely their fault.”
  
  You see, according to leftist Vinnie, everything is the Tea Party’s fault…the economy, fiscal cliff, no jobs, low wages, the Spanish Inquisition, Matt Damon’s career collapse, and Obama’s terrible golf score.
  
  Fill in the blank_________.
  
  The Left is incapable of debate.
  
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- VanceUppercut
  Posted on December 21, 2012 at 11:24am
  @GoodStuff
  
  So you’re saying that the Tea Party is not responsible for Matt Damon’s career collapse? Well, sir, now I know you’re full of it! LOL.
  
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