NEW YORK: Stocks on Wednesday fell sharply after a two-session rally as negotiations to avoid deep spending cuts and tax increases seemed to hit an especially rocky spot.
Retreating from a two-month high, the Dow Jones industrial average fell 98.99 points, or 0.7 percent, to 13,251.97.
The S&P 500 index shed 10.98 points, or 0.8 percent, to 1,435.81.
General Motors Co. jumped 6.6 percent after the automaker said it would buy 200 million shares of its stock from the U.S. Treasury, part of the government’s plan to sell all of its stake in the firm.
Oracle Corp. climbed 3.7 percent a day after the software company reported profit and sales that surpassed Wall Street’s expectations.
The Nasdaq composite index shed 10.17 points, or 0.3 percent, to 3,044.36.
Oil rose for a fourth session, up $1.58, or 1.8 percent, to $89.51 a barrel.
Before trading began, the government reported construction on new homes fell 3 percent while building permits climbed 3.6 percent in November.
“Most were expecting a slight decline, and this was more than we expected. But I don’t think it changes the story, reflected in the permit data, that bodes well for construction in coming months,” said analyst Elizabeth Ptacek of KeyBank.