US STOCKS-Futures sink, bill failure may make fiscal deal unlikely

Fri Dec 21, 2012 8:13am EST
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* Failure of Boehner's bill suggests compromise difficult

* Banking and energy shares could see biggest reaction

* Nike results beat expectations; RIM shares slump in US

* Futures drop: Dow 184 pts, S&P 19 pts, Nasdaq 36.5 pts

By Ryan Vlastelica

NEW YORK, Dec 21 (Reuters) - U.S stock index futures were sharply lower on Friday, dropping more than 1 percent, after a Republican proposal for averting the "fiscal cliff" failed to pass, further eroding hopes that a deal would be reached quickly.

Trading is expected to be volatile as investors view a fiscal agreement between the White House and Republicans before the year-end as increasingly unlikely. With trading thin ahead of the holidays, market swings will probably be amplified. CBOE VIX front-month futures, a measure of volatility, rose 5.7 percent.

Late on Thursday, Republican House Speaker John Boehner conceded there were insufficient votes from his party to pass a tax bill, dubbed "Plan B," to help avert the cliff, a combination of tax hikes and spending cuts that could tip the economy into recession if they take effect next year.

Boehner said he would hold a press conference at 10:00 a.m. ET (1500 GMT), during which he is expected to discuss the vote.   Continued...