Stocks fall as House scraps tax vote

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Global equities are sharply lower this morning after the House canceled last night's scheduled vote on a "Plan B" measure designed to preserve tax breaks while negotiations continue on the so-called fiscal cliff.

U.S. stock futures plunged immediate after the news from Washington but have pared their losses since then. S&P 500 futures are down 1.25 percent, or 18 points, to 1422.90 at the time of this writing. Nasdaq 100 futures are lower by 33 points, or 1.23 percent, to 2657.

European markets are down but also off their session lows. The U.K. FTSE and German DAX are both down about 0.5 percent, and France's CAC-40 is lower by 0.25 percent.

Asian exchanges were open when the House news broke and reacted instantly by reversing lower. Japan's Nikkei began its session by rising 1.3 percent but finished the day down 1 percent. Hong Kong's Hang Seng Index and the Shanghai Composite both dropped 0.7 percent.

Major U.S. stock indexes had been holding gains from recent rallies based on optimism that a resolution would be reached, but the latest move in Congress was viewed as a red flag against prospects of a timely settlement. Many economists agree that failure to avoid the cliff, which would raise taxes and cut government spending at the end of this year, would result in another recession.

Commodities are mixed but not seeing extreme reactions in either direction. Oil is down about 1 point to 89.14 as of this writing. Gold is up about 4 points to 1650, while silver is slightly higher.

In foreign-currency trading, the euro/dollar is down 0.32 percent at $1.3213. A lower euro has been generally bearish for U.S. equities.

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