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NEW YORK (CNNMoney)
U.S. stocks slipped Thursday after consumer confidence data showed that U.S. households are concerned the economy could indeed fall off the fiscal cliff.
The Dow Jones industrial average was down 0.6%. The S&P 500 and the Nasdaq both lost about 0.7%.
The closely watched Consumer Confidence Index, which measures the American public's sentiment every month, sank six points to 65.1, according to the Conference Board. That's a major turnaround since October, when it reached a four-year high of 73.1.
Less than a week remains for President Obama and Congress to agree to a plan that would avert tax hikes and spending cuts from kicking in automatically on Jan. 1.
As lawmakers returned to the Capitol, Senate Majority Leader Harry Reid said it "looks like" the nation will go over the fiscal cliff. Reid blamed House Republicans for refusing to cooperate, saying an agreement is unlikely to be reached before the deadline. "I don't know, time-wise, how it can happen now," he said on the Senate floor.
In response, a spokesman for Speaker John Boehner told CNN that the House has already passed legislation to avoid the fiscal cliff, while Democrats have not. "Senator Reid should talk less and legislate more," said the spokesman, Michael Steel.
Given the bickering over the fiscal cliff, many investors are unwilling to add any risky assets to their portfolios, said Ben Schwartz, chief market strategist at Lightspeed Financial in Chicago.
"Everyone in our industry is sitting on the sidelines waiting to see what happens in Washington," said Schwartz. Still, stocks have been surprisingly resilient given the risks posed by the fiscal cliff. "We're in OK shape," he said.
Related: Fear & Greed Index
Adding fuel to the fiscal fire, Treasury Secretary Tim Geithner sent a letter to Congress after the close Wednesday warning that government borrowing will hit the debt ceiling on Monday. As a result, the Treasury Department will soon start using what it calls "extraordinary measures" to prevent government borrowing from exceeding the legal limit.
Such measures include suspending the reinvestment of federal workers' retirement contributions in short-term government bonds.
In other economic news, new-home sales rose 4.4% in November, as a rebound in the housing market continues. Initial jobless claims came in at 350,000 for the week ended Dec. 22, falling 12,000 from the previous week.
Amazon (AMZN, Fortune 500) shares slid after the company was blamed for a one-day Netflix (NFLX) service disruption. Meanwhile, Marvell Technology Group (MRVL) shares tumbled, after a jury ruled against the chip maker in a $1.17 billion patent infringement case.
Shares of Smith & Wesson (SWHC) rose after the gun company announced plans to buy back $15 million in its own stock.
Related: Investors yank $150 billion out
European markets ended modestly higher in the first trading session after the Christmas holiday. Asian markets ended mixed, with Japan's Nikkei posting the strongest gains. The index has risen nearly 10% in the past month on expectations of further monetary policy easing and new government measures to stimulate the economy.
The U.S. dollar fell versus the euro and British pound, but gained against the Japanese yen. The yield on the 10-year Treasury note nudged higher to 1.76%. Oil and gold prices were modestly lower. 
First Published: December 27, 2012: 9:42 AM ET
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