Leader Harry Reid says the deadline is too soon for Democrats and Republicans to agree on a plan.
NEW YORK (TheStreet) -- U.S. stocks fell after Senate leader Harry Reid said he doubts lawmakers can avert the so-called fiscal cliff before a Dec. 31 deadline.
"I don't know time-wise how it can happen now," said Reid, a Democrat, on the Senate floor in Washington. He said House Speaker John Boehner and Senate Minority Leader Mitch McConnell, both Republicans, are causing a stalemate. "Democrats can't put together a plan on their own because, without participation of Leader McConnell and Speaker Boehner, nothing can happen on the fiscal cliff."
The Senate resumed its work today after breaking for Christmas. Obama, who returned to Washington on Wednesday after taking vacation in Hawaii with his family, has urged Congress to put together an interim plan to stall the tax increases and spending cuts that would be triggered if the debt ceiling isn't raised.
Treasury Secretary Timothy Geithner said he will do all he can to create a cushion for lawmakers. After the stock market closed Wednesday, he said in a letter to Reid that the federal government will reach its $16.394 trillion statutory debt limit on Dec. 31.
Geithner said the Treasury is planning "extraordinary measures" to postpone defaulting on $200 billion in bond payments and create some "headroom" for Washington beyond New Year's Day.
The president now has four days before the deadline. Economists say going off the fiscal cliff could lead to a recession, as growth is sluggish and business owners are cautious about hiring.
The Dow Jones Industrial Average declined 78 points, or 0.6%, to 13,036.85, as of 11:39 a.m. New York time.
The S&P 500 fell 10.3 points, or 0.7%, to 1,409.54. The Nasdaq dropped 19.5 points, or 0.7%, to 2,970.69.
The economic calendar in the U.S. Thursday includes jobless claims, new-home sales and consumer confidence.
The number of Americans who applied for jobless claims dropped by 12,000 to 350,000 in the week ended Dec. 22, the Labor Department said. Economists forecast 360,000. Some of the claims were estimated because of the Christmas holiday.
In another report, new-home sales rose 4.4% to a 377,000 annual pace after a revised 361,000 in October, the Commerce Department said. That was the most since April 2010, another sign the housing market is rebounding.
Still, U.S. consumer confidence dropped to 65.1 in December from a revised 71.5 last month, according to the Conference Board.
Gold for February delivery was up $2.60 at $1,662 an ounce at the Comex division of the New York Mercantile Exchange, reversing earlier losses. February crude oil contracts were down 37 cents to $90.61 a barrel.
The benchmark 10-year Treasury was trading at 1.72%, down 3 basis points. The U.S. dollar index was at 79.64.
Stocks to watch today include Marvell Technology Group(:MRVL), which was ordered by a judge to pay $1.17 billion for infringing patents on integrated-circuit technology held by Carnegie Mellon University. The stock fell 24 cents, or 3.3%, to $7.16.
The most-active movers today are Bank of America(:BAC), Ford(:F), Research In Motion(:RIMM), Nokia(:NOK) and Marvell.
Bank of America dropped 2.1%, Ford slipped 1.9%, Research In Motion also declined 1.9%, and Nokia decreased 2.5%.
Bank of America, Ford and Research In Motion were among the biggest gainers Wednesday.
-- Written by Parris Kellermann
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