Obama Hangs Tough on Taxing the Wealthy

Jim Watsom | AFP | GettyImages

President Obama hangs tough on "tax the wealthy" rhetoric. No indication he will yield on raising rates for the wealthy.

(Read more: Obama: Ending Tax Cuts for Rich Resolves Half of 'Cliff')

The first half-hour of the president's news conference was relatively uneventful from a market perspective: stocks moved mostly sideways.

But shortly after 2pm ET, stocks dropped to the lows of the day as the president, when asked what would happen if we went over the fiscal cliff, noted that it would have an impact on the holiday season, as well as corporate planning.

(Read more: Why Postponing the 'Cliff' Is a Bad Idea: Geithner)

While the president said he was "open to new ideas" on tax rates, and will not slam the door in Republicans' face, he also insisted a modest increase in taxes on the wealthy "will not break their backs" and will not impinge on business investment.

"What I am not going to do is extend Bush tax cuts for the wealthiest 2 percent—that we can't afford," he said.

(Read more: How 'Cliff' Could Affect Mortgage Interest Deduction)

—By CNBC's Bob Pisani

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