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

Here’s what’s shaking

U.S. Consumer Spending:

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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:

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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:

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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:

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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:

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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.

Follow Becket Adams (@BecketAdams) on Twitter

The Associated Press contributed to this report.

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