Obama promotes tax agenda, US Congress in stand-off

With just a month left before the Bush tax cuts expire and automatic spending cuts begin to take hold, markets were anxious about predictions that falling off the fiscal cliff could trigger another recession.

There remains no clarity on the ultimate status on the Bush tax cuts, which have to be resolved before you can move forward with the remainder of the fiscal cliff, said Chris Krueger, an analyst at Guggenheim Securities' Washington Research Group.

MARKETS DOWN MODESTLY

Stock prices declined modestly despite government reports that planned U.S. business spending rose again in October and that single-family home prices rose again in September.

Despite a mild sell-off in stocks, the Dow Jones industrial average closed at about 12,878, up 14 percent from a year ago.

Brian Gardner, an analyst at financial firm Keefe Bruyette & Woods, said a limited deal would likely be struck to avert the fiscal cliff, with larger fiscal issues pushed into 2013.

Fiscal cliff headlines could have the biggest impact on the market, he said. Over the coming weeks, we expect many headlines that will raise and then dash investors' hopes ... The next three weeks could be a bumpy ride.

Fresh from his Nov. 6 re-election, Obama was set to hold another meeting with business executives from larger companies on Wednesday and then to travel to a toy factory in Pennsylvania on Friday to press his case on taxes.

Chief executives from Goldman Sachs, Deloitte LLP, Caterpillar Inc, Yahoo Inc, and Comcast Corp were among the group of leaders set to meet

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