Stocks slip on ‘fiscal cliff’ fears
NEW YORK Stocks finished trading down sharply Wednesday as investors worry about the “fiscal cliff.” The Dow Jones industrial average ended the day down 184 points at 12,571. The Standard & Poor’s 500 index was down 19 at 1,355. The Nasdaq composite index closed down 37 at 2,846. Investors didn’t draw much hope from a news conference by President Barack Obama. He wants Congress to extend expiring tax cuts immediately for all but the highest income earners. Taxes are set to go up for almost all Americans on Jan. 1, the same day sharp cuts to government spending begin to take effect. The combination could send the country back into recession.
Fed hints at new bond-buying program
WASHINGTON The Federal Reserve is signaling that it will likely launch a new bond buying program in December to try to spur job growth. The purchases would be intended to lower long-term borrowing rates to encourage spending and strengthen the economy. The hope is that more hiring would follow. Minutes of its Oct. 23-24 policy meeting suggest that the Fed will unveil a Treasury-buying plan to replace a program that expires at year’s end. Under the existing program, the Fed has been selling short-term Treasurys and using the proceeds to buy an equal amount of longer-term securities. When this program ends, the Fed will run out of short-term investments to sell. The minutes suggest that when they meet next month, officials will replace it with another program to buy long-term bonds.
Toyota recalls nearly 3 million vehicles worldwide
Toyota Motor Corp. announced two safety recalls for its flagship Prius hybrid. The automaker said the steering intermediate extension shafts in 670,000 Prius cars sold in the U.S. need to be inspected and in some cases replaced. And 350,000 of those hybrids also will have to have their electric water pumps replaced. Toyota will recall another 2 million vehicles worldwide, including the Prius and the Corolla, to fix the same problems. In the U.S., the recall includes 2004 through 2009 model year Prius hybrids.
The Associated Press and Los Angeles Times contributed.