(By Balachander) U.S. stocks ended on a sharply higher note amid signs of progress in negotiations over a deal to avert the looming "fiscal cliff".
The S&P 500 Index gained 1.15 percent to end at 1,446.79. The Dow Jones Industrial Average rose 0.87 percent to finish at 13,350.96. The Nasdaq Composite Index jumped 1.46 percent to close at 3,054.53.
President Barack Obama and U.S. House Speaker John Boehner are negotiating to address the so-called "fiscal cliff" of roughly $600 billion in spending cuts and tax increases set to begin in January.
Obama made a new budget offer that would raise taxes on those making $400,000, instead of $250,000.
Boehner, who termed Obama's latest offer as not balanced, has proposed a measure that allows tax increases only on those earning over $1 million.
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The White House on Tuesday rejected Boehner's "Plan B" proposal, saying the approach will not protect middle class families and does little to address fiscal challenges with zero spending cuts.
The President is not willing to accept a deal that doesn't ask enough of the very wealthiest in taxes and instead shifts the burden to the middle class and seniors, The White House said in a statement.
On the U.S. data front, a report from the National Association of Home Builders showed housing market index rose to 47 in December from a revised 45 last month, reaching a new six-year high.
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In corporate news, Apple Inc. (NASDAQ: AAPL) jumped 2.92 percent though the technology behemoth lost a key ruling. A California judge denied Apple's request to ban 26 Samsung devices.
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American International Group Inc. (NYSE: AIG) has priced the sale of roughly 1.65 billion shares of Asian life insurer AIA Group Ltd. at $3.91 (30.30 Hong Kong dollars) apiece. Shares added 1.57 percent.
American Railcar Industries Inc. (NASDAQ: ARII), controlled by billionaire-investor Carl Icahn, has proposed to acquire railcar maker Greenbrier Companies Inc. (NYSE: GBX) for $20 per share in cash. ARII shares jumped 6.64 percent and GBX shares added 7.38 percent.
Arbitron Inc. (NYSE: ARB), a provider of marketing information services, agreed to be acquired by analytics company Nielsen Holdings N.V. (NYSE: NLSN) for $48 per share in cash. ARB shares surged 23.63 percent.
FactSet Research Systems Inc. (NYSE: FDS) fell 4.36 percent after the provider of financial information issued revenue forecast that trailed consensus.
Diamond Foods Inc. (NASDAQ: DMND) added 2.58 percent after the company's adjusted quarterly earnings beat expectations by a penny. DMND posted a first-quarter loss as sales fell 10 percent.
Xyratex Ltd. (NASDAQ: XRTX) added 2.81 percent after the data storage technology provider declared a special cash dividend of $2 per share, payable Dec. 31 to shareholders of record on Dec. 27.
European markets closed on a positive note, with Germany's DAX up 0.64 percent to close at 7,653.58. France's CAC40 added 0.29 percent to finish at 3,648.63. The U.K.'s FTSE 100 gained 0.40 percent to end at 5,935.90.
Asian markets ended mixed, with China's Shanghai Stock Exchange Composite Index inched up 0.10 percent to finish at 2,162.46. Japan's Nikkei 225 added 0.96 percent to close at 9,923.01. Hong Kong's Hang Seng Index shed 0.08 percent to end at 22,494.73. India's BSE Sensex ended at 19,364.75, up 0.63 percent.
Commodity & Currency Scan
Crude oil futures added 0.83 percent to $87.92 per barrel, and natural gas futures climbed 1.10 percent to $3.40 per million metric British thermal units. Gold futures dropped 1.54 percent to $1,672.1 per ounce and silver futures fell 1.89 percent to $31.67 per ounce.
In the currency market, the euro gained 0.44 percent against the U.S. dollar to 1.3222. The British pound rose 0.28 percent against the greenback to 1.6249, and the dollar advanced 0.37 percent against the Japanese yen to 84.2000.