The broad indexes pulled back after the Whitehouse said that President Obama would veto a proposal by Speaker of the House John Boehner to avert the Fiscal Cliff by limiting the increase of federal income tax rates to increase on couples earning $1 million a year or more, in the unlikely event that a bill of this type would be introduced, pass both the house and the Democrat-controlled Senate, and find its way to the president's desk.
White House Communications Director Dan Pfeiffer released a "Fact Sheet," saying that Boehner's plan would "raise taxes by an average of $1,000 on 25 million working families with children and students," as it would "not continue the American Opportunity Tax Credit and improvements to the Child Tax Credit and Earned Income Tax Credit."
The Census Bureau on Wednesday said that housing starts declined to a seasonally adjusted annual rate of 861,000 in November from a downwardly revised 888,000 in October. There was a bright note in the data, as residential building permits rose to an annual pace of 899,000 units in November from an upwardly revised 868,000 in October.Bank stocks took a breather, with the KBW Bank Index (I:BKX) down slightly to close at 51.22, with all but five of the 24 index components seeing declines. UBS (UBS) on Wednesday announced that it had agreed to pay $1.5 billion to global bank regulators to settle a probe against the company for manipulating its Libor rate submissions. The company also said that its Japanese subsidiary had "agreed to enter a plea to one count of wire fraud relating to the manipulation of certain benchmark interest rates, including Yen LIBOR." UBS admitted that employees "engaged in efforts to manipulate submissions for certain benchmark rates to benefit trading positions." Large U.S. banks, including Bank of America (BAC) and JPMorgan Chase (JPM) have referred to litigation reserves related to regulatory probes over Libor submissions. Bank of America's shares were down 1.5% to close at $11.19, while JPMorgan was down nearly 1%, closing at $43.53.
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