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Stocks decline with all eyes on D.C.

U.S. markets opened cautiously Thursday, Dec. 12, 2012,

U.S. markets opened cautiously Thursday, Dec. 12, 2012, despite strong news on jobs and retail spending. (Dec. 6, 2012) Photo Credit: AP

Stocks sank most of Thursday after more signs of tension emerged in federal budget talks. They recovered some of the loss after a late report that President Barack Obama and the House speaker would meet.

The Dow Jones industrial average finished down 74.73 points, to 13,170.72.

House Speaker John Boehner, speaking to reporters in Washington before noon, said that the White House was so resistant to cutting government spending that it risked pushing the country off the "fiscal cliff," a series of tax increases and government spending cuts that will take effect Jan. 1 unless Congress and the White House reach a deal to avert them.

Shortly after Boehner spoke, Obama told reporters that a deal was "still a work in progress." Asked about Boehner's assertion that he was waiting to hear more from the president, Obama said only, "Merry Christmas." The Dow drifted lower all day and was down 98 points at its midafternoon low. Then the Obama administration said the president and Boehner would meet later Thursday at the White House.

Stocks still finished in the red. The Standard & Poor's 500 index dropped 0.63 percent to 1,419.45. The Nasdaq composite index fell 0.72 percent to 2,992.16.

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