We have updated our privacy policy and terms & conditions. Find out more here.
1
 

U.S. stocks rise as fiscal cliff talks near resolution, Dow gains 0.87%

By Investing.com  |  Stock Markets  |  Dec 18, 2012 09:41PM GMT  |   Add a Comment
 
AA
+
-
Investing.com - U.S. stock prices finished higher on Tuesday after the White House and Congress moved closer to striking a deal to avoid a year-end fiscal cliff, a combination of tax hikes and spending cuts due to take affect early next year.

U.S. stocks rise as fiscal cliff talks near resolution, Dow gains 0.87%
Failure to avoid the cliff could push the country into a recession next year.

At the close of U.S. trading, the Dow Jones Industrial Average finished up 0.87%, the S&P 500 index was up 1.15%, while the Nasdaq Composite index rose 1.46%.

Stocks gained on talk the White House and Congress are closer to agreeing on a plan to push through fiscal reforms and avoid recession next year.

At the end of 2012, the Bush-era tax breaks and other benefits are set to expire at the same time cuts to government spending are scheduled to kick in, a combination known as a fiscal cliff that could contract the economy by 0.5% next year if Congress fails to avoid it, according to Congressional Budget Office estimates.

Both sides of the U.S. political aisle have previously disagreed over the role income tax reforms should play when it comes to crafting a 2013 fiscal framework, with Democrats originally calling for tax hikes on those earning at least USD250,000 a year, with Republicans originally opposed to tax hikes for anyone.

The two political parties have since made concessions, with Republicans warming up to tax hikes on the wealthy by offering to raise rates on those earning a minimum USD1 million a year, with Democrats reportedly countering by raising the floor to USD400,000 from USD250,000.

Sticking points still remain, as Republicans have said they want to see more details surrounding Democratic proposals to cut spending and reform entitlement programs such as Social Security or Medicare, though stocks rallied on optimism that both sides remain willing to work together to find a solution.

Elsewhere, the U.S. current account deficit narrowed in the third quarter of 2012, posting the smallest deficit since the fourth quarter of 2010, government data revealed earlier Tuesday.

The U.S. Bureau of Economic Analysis reported earlier that the country’s current account deficit narrowed to a seasonally adjusted USD107.5 billion in the third quarter from a revised deficit of USD118.1 billion.

Analysts had expected the U.S. current account deficit to narrow to USD103.4 billion in the third quarter.

Leading Dow Jones Industrial Average performers included Bank of America, up 3.27%, United Technologies, up 2.80%, and Hewlett-Packard, up 2.25%.

The Dow Jones Industrial Average's worst performers included General Electric, down 1.09%, Coca-Cola, down 0.59%, and Verizon Communications, down 0.57%.

European indices, meanwhile, finished higher.

After the close of European trade, the EURO STOXX 50 rose 0.59%, France's CAC 40 rose 0.29%, while Germany's DAX 30 finished up 0.64%. Meanwhile, in the U.K. the FTSE 100 gained 0.40%.

On Wednesday, the U.S. is to publish government data on building permits, an excellent gauge of future construction activity, as well as data on housing starts.

The country is also to release official data on crude oil stockpiles.











Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data .

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Add a Comment

 

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

NQ 100
 
 
 
Are you sure you want to delete this chart?
 
 
 
Are you sure you want to delete this chart?
 
 
 

Successfully Reported

Thank you. This comment has been flagged for a moderator.
_touchLoadingMsg