NEW YORK, Dec. 27 (UPI) -- U.S. stock markets slumped Thursday as investors braced for the possibility the economy would be jolted by the lack of a new budget agreement.
Without a new budget plan in place by Jan. 1, a budget that calls for $500 billion in spending cuts and tax hikes would take effect. This has widely been predicted to be too much of an adjustment for the economic recovery, which some analysts say would turn into a recession should the default budget take effect.
In early afternoon trading Thursday, the Dow Jones industrial average lost 138.94 points or 1.06 percent to 12,975.65. The Nasdaq lost 32.12 points or 1.07 percent to 2,958.04.
The Standard & Poor's 500 shed 14.52 points or 1.02 percent to 1,405.31.
The 10-year treasury note was up 13/32 to yield 1.71 percent.
The euro fell to $1.3222 from Wednesday's $1.3224. The dollar rose to 85.97 yen from 85.62 yen.
In Tokyo, the Nikkei 225 index added 0.91 percent, 92.62 points, to 10,322.98.
In London, the FTSE 100 index rose less than 0.01 percent, adding 0.12 points to 5,954.30 after the Boxing Day holiday.
Ford investments in 2013 to add jobs
DEARBORN, Mich., Dec. 27 (UPI) -- A Ford Motor Co. executive said the automaker was "on track" for fulfilling a pledge to invest $6.2 billion in U.S. jobs and facility upgrades.
"We're absolutely on track with all of the commitments," said Ford Vice President of North American Manufacturing Jim Tetreault.
The Detroit News reported Thursday Ford was set to spend $773 million in southeastern Michigan, investing in significant upgrades at the Dearborn Stamping Plant in an effort to gear up for F-Series truck production in 2014. Ford will also increase production capacity at the Michigan Assembly Plant, which assembles passenger cars.
While more than one-third of the new investment -- $335 million -- will be spent on the Dearborn Stamping Plant, Ford expects to invest $87 million at the Van Dyke Transmission Plant, $74 million at the Livonia Transmission Plant, $161 million at the Flat Rock Assembly Plant and $85 million at the Sterling Axle Plant, the News said.
About 1,200 jobs, most of them new, will be created at the Flat Rock plant. In all, 2,300 new Ford jobs are expected in southeastern Michigan in 2013.
N.H. airline offers $12 flights to NYC
LEBANON, N.H., Dec. 27 (UPI) -- A New Hampshire airline is offering $12 flights to New York City, less than the cost of a ride from JFK to midtown -- which is included in the deal, too.
Cape Air, based in Lebanon, N.H., is offering the deal for the rest of the year in an effort to boost ridership at the Lebanon Airport.
If the airport exceeds 10,000 passengers this year it will gain access to an additional $850,000 in funding from the Federal Aviation Administration, WMUR-TV, Manchester, N.H. reported Thursday. They additional funding would allow the airport to upgrade runways and perform other maintenance.
The airport was less than 50 passengers shy of reaching the 10,000 passenger goal Thursday.
All told, for less than the cost of lunch, residents in Lebanon can get from there to Manhattan in 2 1/2 hours, including a ride from the airport. The $12 cost for the airfare covers taxes and fees - -the flights themselves are free.
Cape Air is also offering the $12 fare to Boston's Logan Airport, WMUR said.
The deal ends Monday.
U.S. now largest buyer of Chinese exports
BEIJING, Dec. 27 (UPI) -- The United States replaced the European Union in 2012 as the No. 1 market for Chinese exports, buying $319.4 billion of goods through November, Beijing said.
The Chinese Commerce Ministry said U.S. purchases during the period represented an 8.2 percent increase from the same period of 2011. During the same period, China imported $119.2 billion of U.S. goods, up 8.1 percent year-on-year.
The total two-way volume of trade between China and the United States of $438.62 billion gave China a trade surplus of more than $200 billion in the 11 months of 2012. That was up sharply from its surplus of $148.3 billion a year ago.
Chinese exports to the European Union declined 4.1 percent in the same 11-month period to $302.3 billion, China Daily reported.
At the same time, China's trade with Japan dropped by 2.9 percent.
China's total foreign trade in the first 11 months of 2012 rose 5.8 percent year-on-year to $3.5 trillion, much less than the government's target of 10 percent.
One analyst told China Daily U.S.-China trade will continue to increase next year as the U.S. economy is recovering.
Celebrity Families of 2014 [PHOTOS]