Markets closed down on Wall Street today: Dow -0.94%, S&P -0.98%, Nasdaq -0.36%, Oil -2.48%, Gold -1.78%.
On the commodities front, Oil (NYSE:USO) fell to $85.78 a barrel. Precious metals also declined, with Gold (NYSE:GLD) falling to $1,782.40 an ounce while Silver (NYSE:SLV) fell 2.51% to $39.81 an ounce.
Hot Feature: U.S. Gas Imports Expected to Decline 5% in September
Today’s markets were down because:
1) Obama. President Obama proposed $1.5 trillion in new taxes this morning as part of over $2 trillion in deficit-reduction measures he is urging a 12-member joint committee of Congress, set up as part of the August 2 debt deal to come up with another $1.5 trillion of deficit reductions over the next decade, to enact. The president hopes the group will make more cuts than the original package stipulates, and will do so largely through new taxes on the wealthy. While the plan is receiving lots of popular support, it doesn’t have the backing of the Republican party, which has accused the president of waging “class warfare” with his one-sided tax hikes, and with Republicans leading the House of Representatives, Obama’s plan could go the way of all other large deficit-reduction plans proposed in July ahead of the August 2 deadline for a deal.
2) Greece. The country continues to be a sore spot for investors and the global economy, as the world awaits a decision on whether Greece will receive its next tranche of aid, allowing it to put off default a bit longer. Markets opened down this morning as they awaited news from EU and IMF inspectors on whether Greece had fulfilled the terms of its bailout package, instituting the necessary deficit reductions. While inspectors were to finish that finish their assessment today, a decision on whether Greece will receive its next tranche of aid has yet to be made, and without it, Greece’s government could go into default within weeks.
3) Healthcare. As part of his proposed deficit-reduction measures, President Obama is seeking $320 billion in cuts on U.S. government healthcare spending. Drugmakers will be deal two blows if Obama’s plan is approved. The first blow would be dealt by Obama’s proposal that the window of market exclusivity for drugs be reduced from 12 years to seven. The second aspect of the plan would require makers of brand-name drugs to give a 23% rebate to the government for low-income Medicare beneficiaries receiving a subsidy to pay for coverage, according to two senior administration officials who wish to remain anonymous. General drugmakers would have to give a 13% rebate. Pfizer (NYSE:PFE), Merck (NYSE:MRK), Johnson & Johnson (NYSE:JNJ), Abbott Labs (NYSE:ABT), and many other of the nation’s top pharmaceutical companies are trading down today on the news.