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Stocks Are Held Hostage as S&P 500 CEOs Plan to Cut Spending

Washington negotiations or lack thereof of primary cause.

By Inyoung Hwang, Bloomberg | Updated on December 17, 2012

The U.S. budget debate is holding stocks hostage, as chief executive officers prepare to cut capital spending for the first time since 2009 should President Barack Obama and Congress fail to reach an accord.

Expenditures by Standard & Poor’s 500 Index companies will fall 1.3 percent in 2013 after three years of growth, according to more than 10,000 analyst estimates compiled by Bloomberg. Companies from Verizon Communications Inc. to Rockwell Collins Inc. said they don’t plan to boost investment amid concern political leaders will fail to agree on a plan that would avert more than $600 billion of spending cuts and tax increases that threaten to throw the U.S. into another recession.

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