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Investors sending signals to lawmakers

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Investors sent Washington a reminder Friday that Wall Street is a power player in talks to avoid the fiscal cliff. Stocks fell sharply after House Republicans called off a vote on tax rates and left budget talks in disarray. The Dow closed down 120.88 points. The decline Friday demonstrated that investors’ nerves are raw as they await a resolution. If the full fiscal cliff takes effect, economists say it could drag the US into recession next year. If budget talks dragged on, many businesses might put off investment or hiring, and consumer spending could suffer. That’s why most economists say it would be crucial to reach a deal within the first two months of 2013.

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