Wall Street closes down as fiscal cliff talks hit wall

The major Wall Street benchmarks closed lower in trading last night (December 19th) as Barack Obama's crucial fiscal cliff talks with House of Representatives speaker John Boehner hit a wall.

Both politicians have been working hard to negotiate a deal for cushioning the imminent impact of the basket of government spending cuts and tax rises due to hit the world's number one economy simultaneously in the new year.

It had been thought progress was being made, as both sides have yielded and made sacrifices to move the talks forward, but last night the president accused the Republicans of holding a grudge against him, saying: "It is very hard for them to say yes to me."

Obama also threatened to veto Mr Boehner's so-called Plan B tax bill proposed on Tuesday, if it goes through Congress.

"The White House's opposition to a backup plan … is growing more bizarre and irrational by the day," the speaker's spokesman Brendan Buck remarked.

At close of play last night, the Dow Jones retreated by 0.7 per cent to 13251.9 points.

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