(MENAFN - ProactiveInvestors - Australia) U.S. stocks on Wednesday erased earlier gains after the White House rejected the latest Republican budget proposal to avert the fiscal cliff.
As of around noon, the Dow was down 10 points to 13,341, the Nasdaq edged up 2 points to 3,057 and the S&P 500 was lower by 2 points to 1,445.
White House communications director Dan Pfeiffer said in a statement that President Barack Obama would veto the plan offered by House Speaker John Boehner, which includes raising taxes on incomes of 1 million or above.
Boehner originally wanted tax increases on no one, but the threshold is still much higher than President Obama's 400,000 threshold, which was already a concession.
"The proposal from the Ohio Republican would give millionaires a tax break of 50,000, while eliminating tax cuts that 25 million students and families struggling to make ends meet depend on," Pfeiffer said.
A vote is expected on Thursday.
On the economic front, the only data point was housing starts for November. Housing starts last month fell to 861,000 from a downwardly revised 888,000 in October. Analysts expected less of a drop, to 865,000, largely due to the impact from Hurricane Sandy.
Building permits, meanwhile, rose 3.6% in November to 899,000 rate.
In corporate news, economic bellwether, FedEx (NYSE:FDX) stood by its full-year earnings outlook, while Hurricane Sandy hurt profits in the second quarter. FedEx also said it expects to show a third-quarter profit of 1.25 to 1.45 a share, down from a year ago and compared to a 1.45 estimate, but affirmed its full-year adjusted earnings target of 6.20 to 6.60 a share.
General Mills (NYSE:GIS) raised its profit outlook for the year, and quarterly profit came to 541.6 million, or 82 cents a share, up from 444.8 million, or 67 cents, earned in the same period during fiscal 2012. Sales improved to 4.88 billion from the prior year's 4.62 billion.
Navistar International Corp. (NYSE:NAV) swung to a wider-than-expected fiscal fourth-quarter loss due to several large charges, while sales declined. The vehicle and engine manufacturer recently agreed to name to its board three directors nominated by activist investor Carl Icahn.
Shares of General Motors (NYSE:GM) jumped over 8% after the auto maker 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 company in the next 12 to 15 months.
According to a Bloomberg report, healthcare company Pfizer (NYSE:PFE) will cut about a fifth of its 3,000-member sales force for primary care pharmaceuticals as part of a continued cost-cutting strategy after losing its patent on its cholesterol drug, Lipitor.
Also late Tuesday, Oracle (NASDAQ:ORCL) posted better-than-expected results for its second fiscal quarter, and issued an upbeat forecast for its hardware business next quarter, sending shares higher on Wednesday.
Gold futures turned higher in the afternoon as the fiscal cliff deadlock continued in Washington, with the metal lately up 1 to 1,672 an ounce.
Oil for January delivery also rose 1.43 to 89.36 a barrel. The Energy Information Administration reported Wednesday that U.S. crude supplies fell by 1 million barrels for the week that ended Dec. 14. Analysts polled by Platts expected a 2.3 million-barrel decline.
European markets finished higher today with shares in France leading the region, which saw an improvement in German business confidence. The CAC 40 rose 0.44% while Britain's FTSE 100 gained 0.43% and Germany's DAX was higher by 0.19%.