US STOCKS-Wall Street falls on fiscal cliff setback

Fri Dec 21, 2012 4:22pm EST
 
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* Confidence drops after failure of Boehner bill

* Herbalife shares skid, down for 8th straight day

* Banking shares slide; Citigroup and BofA shares sink

* Stocks fall: Dow 0.91 pct, S&P 500 0.94 pct, Nasdaq 0.96 pct

By Gabriel Debenedetti

NEW YORK, Dec 21 (Reuters) - U.S. stocks finished lower on Friday after a Republican plan to avoid the "fiscal cliff" failed to gain sufficient support on Thursday night, draining hopes that a deal would be reached before 2013.

Still, stocks managed to rebound from the day's lows near the end of the session, and for the week, major averages still ended higher, with the S&P 500 gaining 1.2 percent.

Trading was volatile as confidence eroded in the prospect of a deal out of Washington, and in part due to quarterly expiration of options and futures contracts. The CBOE Volatility Index or VIX, the market's favored anxiety measure, finished below its high of the day.

Republican House Speaker John Boehner failed to garner enough votes from even his own party to pass his "Plan B" tax bill late on Thursday. It was the latest setback in negotiations to avoid $600 billion in tax hikes and spending cuts that some say could tip the U.S. economy into recession.   Continued...