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Stocks End Sharply Higher Amid 'Cliff' Talks; Clearwire (CLWR) Tumbles

 December 17, 2012 05:19 PM

(By Balachander) U.S. stocks closed sharply higher amid reports of progress in talks over a deal to avert the looming "fiscal cliff".

The S&P 500 Index rose 1.19 percent to end at 1,430.38. The Dow Jones Industrial Average added 0.76 percent to finish at 13,235.39. The Nasdaq Composite Index jumped 1.32 percent to close at 3,010.60.

President Barack Obama and U.S. House Speaker John Boehner met at the White House to address the so-called "fiscal cliff" of roughly $600 billion in spending cuts and tax increases set to begin in January.

Aides from both parties said they were optimistic that a deal could be reached in coming days, Reuters reported on Monday. Boehner reportedly is open to a tax increase on incomes of over $1 million annually.

[Related -Smith & Wesson Holding Corp. (NASDAQ:SWHC) Q2 Earnings Preview: Gonna Fire Blank Guidance?]

On the data front, the New York Federal Reserve's manufacturing survey showed that the general business conditions index was negative for a fifth straight month plunging to -8.1 for December compared with a -5.2 for November. Economists expected a reading of -1.0 for the month.


In corporate news, Clearwire Corp. (NASDAQ: CLWR) plunged 13.95 percent after Sprint Nextel Corp. (NYSE: S) agreed to acquire shares in the company it does not already own for $2.97 per share, up 7 cents per share from its earlier proposal. Sprint's deal represents a 12.0 discount to CLWR's previous closing price.

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American International Group Inc. (NYSE: AIG) gained 2.98 percent after the insurer priced the sale of roughly 1.65 billion shares of Asian life insurer AIA Group Ltd. between $3.83 (29.65 Hong Kong dollars) and $3.95 (30.65 Hong Kong dollars) each.

Compuware Corp. (NASDAQ: CPWR) surged 12.80 percent after Elliott Management Corp. offered to buy business software developer for $11.00 per share in cash or $2.3 billion.

Tenet Healthcare Corp. (NYSE: THC) rose 1.80 percent. Shares of the health care services company were upgraded to "buy" from "hold" and price target raised to $38 from $31 by Deutsche Bank (DB).

Lexicon Pharmaceuticals Inc. (NASDAQ: LXRX) surged 6.15 percent after the biopharmaceutical company said it received "Fast Track" status for irritable bowel syndrome drug candidate.

Caribou Coffee Company Inc. (NASDAQ: CBOU) jumped 30.68 percent after the company agreed to be taken private by an affiliate of the Joh. A. Benckiser Group (JAB) for $16.00 per share, or roughly $340 million, in cash.

Smith & Wesson Holding Corp. (NASDAQ: SWHC) retreated 5.26 percent amid reports of a proposal on change in gun policy, following shooting on Friday that left 20 children dead.

Enzon Pharmaceuticals Inc. (NASDAQ: ENZN) is considering selling itself, and the biotechnology company plans to suspend clinical development with an objective to maximize value to shareholders. Shares of the Piscataway, New Jersey-based Enzon added 3.06 percent.

Global Markets

European markets ended mixed, with Germany's DAX inching up 0.11 percent to close at 7,604.94. France's CAC40 dipped 0.14 percent to finish at 3,638.10. The U.K.'s FTSE 100 fell 0.16 percent to end at 5,912.15.

Asian markets ended mixed, with China's Shanghai Stock Exchange Composite Index gaining 0.45 percent to finish at 2,160.34. Japan's Nikkei 225 jumped 0.94 percent to close at 9,828.88. Hong Kong's Hang Seng Index fell 0.41 percent to end at 22,513.61. India's BSE Sensex ended at 19,244.42, down 0.38 percent.

Commodity & Currency Scan

Crude oil futures added 0.69 percent to $87.33 per barrel, and natural gas futures climbed 1.33 percent to $3.36 per million metric British thermal units. Gold futures inched 0.09 percent higher to $1,698.7 per ounce while silver futures slipped 0.09 percent to $32.28 per ounce.

In the currency market, the euro was flat against the U.S. dollar at 1.3160. The British pound gained 0.18 percent against the greenback to 1.6203, and the dollar advanced 0.40 percent against the Japanese yen to 83.8500.



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