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U.S. stocks closed lower on Christmas Eve, as investors worried about the fiscal cliff. Meanwhile, retailers report stronger sales before the holiday, though one tracking group said shoppers were spending less than in 2011.
With time running out before the "fiscal cliff" is a reality, investors are pessimistic about a deal. Stocks have finished lower again Monday, with the Dow industrials losing 52 points. The S&P 500 fell three points, while the Nasdaq composite dropped 8.
One Wall Street strategist said he's starting to see "a little bit of an acceptance" that the government will, in fact, go over the "fiscal cliff."
"People are starting to think about how they may plan their portfolio if that does happen," said JJ Kinahan of TD Ameritrade.
In more than a dozen interviews with The Associated Press, conservative activists said they'd rather see the country fall off the cliff than agree to any tax increases for any Americans.
Even if there's no deal to avoid the "fiscal cliff" and taxes go up in January, workers probably won't see the full effect in their paychecks right away.
Michael O'Toole of the American Payroll Association says the IRS hasn't yet released the tax withholding tables for next year, as the uncertainty drags on. So he said employers are planning to withhold at the 2012 rates, at least for the first paycheck or two.
Meanwhile, the possibility of increased taxes (and smaller paychecks) doesn't seem to be holding back holiday shopping. A company that operates 28 shopping malls across the country is reporting a "very strong weekend," with shoppers taking advantage of sales.
But despite the report from Taubman Centers, many last-minute shoppers across the nation say they are spending less than they did last year.