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Stocks Gain Amid Budget Deal Hopes; Dollar General (DG) Tumbles

 December 11, 2012 04:25 PM

(By Balachander) U.S. stocks ended on a positive note amid hopes of an agreement to avert the looming "fiscal cliff" and investors await Federal Reserve's monetary policy announcement on Wednesday.

The S&P 500 Index gained 0.65 percent to end at 1,427.84. The Dow Jones Industrial Average added 0.60 percent to finish at 13,248.44. The Nasdaq Composite Index rose 1.18 percent to close at 3,022.30.

President Barack Obama and U.S. House Speaker John Boehner held more talks in Washington over a deal to avert the so-called "fiscal cliff". Obama has pushed for higher taxes on wealthy Americans to address the fiscal cliff of roughly $600 billion in spending cuts and tax increases that could hit economic growth.

The Wall Street Journal reported that budget talks have made steady progress in recent days.

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CNBC, meanwhile, reported that Senate Majority Leader Harry Reid said it will be hard to reach a budget agreement by Christmas.

Investors keenly anticipate announcement from the Federal Reserve's two-day meeting and Fed Chairman Ben Bernanke's conference on Wednesday for any hints regarding monetary policy. Economists expect the Fed to launch a new bond-buying program to spur growth.

On the U.S. data front, a report showed that the trade gap widened to $42.2 billion for October from a revised $40.3 billion in September, while economists expected deficit of $42.6 billion.


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In corporate news, Apple Inc. (NASDAQ: AAPL) rose 2.11 percent amid reports that the company's major supplier Foxconn posted record sales in November due to strong shipments of consumer electronics.

American International Group Inc. (NYSE: AIG) said the U.S. Department of the Treasury has agreed to sell remaining shares in AIG. Treasury priced an offering of roughly 234.2 million shares of AIG at $32.50 each. AIG shares gained 5.70 percent.

Dollar General Corp. (NYSE: DG) tumbled 7.79 percent after the the discount retailer posted its quarterly earnings and updated its forecast for the full year. The company said it continues to be cautious for the remainder of the year and added it is facing a significant same-store sales comparison from its fourth quarter of 2011.

Texas Instruments Inc. (NASDAQ: TXN) added 3.99 percent after the maker of analog chips narrowed its fourth-quarter earnings and revenue guidance.

Delta Air Lines Inc. (NYSE: DAL) added 5.13 percent after the air liner said it will invest $360 million in Virgin Atlantic, acquiring a 49 percent stake currently held by Singapore Airlines.

Urban Outfitters Inc. (NASDAQ: URBN) jumped 4.46 percent after the company said comparable Retail segment net sales are high single-digit positive so far during the fourth quarter of fiscal 2013.

Tripadvisor Inc. (NASDAQ: TRIP) surged 6.56 percent after Liberty Interactive Corp. (NASDAQ: LINTAannounced it has taken a voting control of its stake in the online travel research company.

Clearwire Corp. (NASDAQ: CLWR) gained 11.67 percent amid reports Sprint (S) was in discussions to buy out the wireless broadband services provider.

Magellan Health Services Inc. (NASDAQ: MGLN) fell 5.74 percent after the company issued its earnings and revenue forecast for 2013 and the specialty managed healthcare business named its board member Barry Smith as its chief executive.

Casey's General Stores Inc. (NASDAQ: CASY) added 5.48 percent after the operator of convenience stores posted second-quarter results that were in-line with Wall Street expectations.

TNS Inc. (NYSE: TNS) jumped 42.58 percent after the data communications company agreed to be acquired by an investor group led by Siris Capital for roughly $862 million or $21.00 per share in cash.

Perry Ellis International Inc. (NASDAQ: PERY) climbed 6.28 percent after the apparel company declared a special dividend of $1 per share.

Global Markets

European markets ended higher after a report showed a gain in German investor confidence. Germany's DAX advanced 0.78 percent to close at 7,589.75. France's CAC40 added 0.94 percent to finish at 3,646.15. The U.K.'s FTSE 100 rose 0.06 percent to end at 5,924.97.

Asian markets ended on a mixed note, with China's Shanghai Stock Exchange Composite Index down 0.44 percent to finish at 2,074.70. Japan's Nikkei 225 edged 0.09 percent lower to close at 9,525.32. Hong Kong's Hang Seng Index added 0.21 percent to end at 22,323.94. India's BSE Sensex ended at 19,387.14, down 0.12 percent.

Commodity & Currency Scan

Crude oil futures gained 0.33 percent to $85.84 per barrel, while natural gas futures dropped 1.33 percent to $3.41 per million metric British thermal units. Gold futures shed 0.19 percent to $1,711.2 per ounce and silver futures declined 1.10 percent to $33.01 per ounce.

In the currency market, the euro gained 0.49 percent against the U.S. dollar to 1.3004. The British pound rose 0.21 percent against the greenback to 1.6109, and the dollar added 0.22 percent against the Japanese yen to 82.5400.



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