A trader works on the floor at the New York Stock Exchange in New York, Friday. Stocks were heading lower Friday, for a fifth day, on concern that Washington lawmakers will fail to reach a budget deal before a year-end deadline.
Despite the hype and hysteria over the fiscal cliff, it's unlikely the stock market will suffer a hair-raising correction, at least in the short term, if politicians can't agree on a deal.
If lawmakers don't avoid automatic tax increases and government spending cuts by Dec. 31, the stock market may suffer a drop of just 2 percent to 3 percent, some Wall Street analysts say.
The reason investment strategists don't expect a massive sell-off is because they believe some sort of deal will come early in the new year, limiting damage to the economy from any short-term fiscal drag. ...