Stock futures put on brave face ahead of 'fiscal cliff'

LONDON -- U.S. stocks were preparing for their final trading day of 2012 Monday, on a day when Washington lawmakers have less than 24 hours to prevent the U.S. economy from tumbling over the so-called fiscal cliff and potentially back into recession.

U.S. stock index futures were higher ahead of the opening bell, pointing to a higher open on Wall Street as congressional leaders were expected to restart last-ditch efforts to broker a "fiscal cliff" deal at 11:00 a.m. ET.

Major markets across the world have fared well this year, with benchmarks in Europe and Asia leading the way. The Stoxx Europe 600 stock index is set to gain around 14% for the year; in Japan, the Nikkei Average added over 22% on an annual basis.

The Dow Jones Industrial Average has seen more modest advances in 2012 - up around 6% for the year ahead of today's session, and partly held in check by heightened anxiety over budget negotiations that have left Republicans and Democrats divided over tax increases and spending cuts.

In Europe, notable regional stock indexes traded in opposite directions, with mining and banking stocks in London falling, but shares in Paris on the rise.

Trading during the Asia market day ended on a sour note, apart from mainland China stocks, which saw gains.

If no U.S. deal is done, a series of automatic tax increases and spending cuts will be triggered at midnight, and the U.S. can be expected to face around $671 billion of tax increases and spending cuts in the early part of 2013.

"With the gulf between both parties still wide and the desire to protect their supporters' key interests so ingrained, it is difficult to see how both sides can compromise enough to agree a deal at this point," said Rebecca O'Keeffe, head of investment at Interactive Investor.

In other financial markets, the euro currency declined 0.2% against the dollar at $1.3191, and the price of benchmark New York crude fell 11 cents to $90.69 a barrel.

USA Today