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Overnight Markets: Budget deal prospects lift U.S. stocks

by Himanshu Singh on Dec 18, 2012 at 03:24

Overnight Markets: Budget deal prospects lift U.S. stocks

Wall Street advanced on Monday, with the Standard & Poor’s 500 Index ending at its highest level in almost two months, as investors weighed prospects for a budget deal in Washington.

The Dow Jones industrial average was up 100 points, or 0.76%, at 13,235. The S&P 500 was up 17 points, or 1.19%, at 1,430, its highest close since 22 October. The Nasdaq Composite Index was up 39 points, or 1.32%, at 3,011.

Shares climbed, led by financials and other growth-oriented sectors, after President Barack Obama and Republican House Speaker John Boehner met at the White House on Monday, raising expectations that Washington will be able to head off steep tax hikes and spending cuts that threaten the economy.

Boehner has edged closer to Obama's position by proposing to extend lower tax rates for everyone who earns less than $1 million.

Bank of America jumped 4% after Meredith Whitney Advisory Group shifted to a positive stance on financials and upgraded Bank of America, Citigroup and Discover Financial shares.

American International Group Inc. shares rose 3% on plans to sell as much as $6.5 billion of AIA Group Ltd. Citigroup were up 4.1%, while Discover Financial gained 1.6%.

In deal news, Clearwire Corp tumbled 13.6% after agreeing to sell the rest of the company to Sprint Nextel Corp for a slightly sweetened $2.2 billion offer. Sprint was up 0.2%.

Compuware Corp rose 12.9% after hedge fund Elliott Management offered to buy the business software maker for $2.3 billion.

Apple Inc shares edged up, rising 1.8%, after the tech giant said it sold more than 2 million of its new iPhone 5 smartphones in China during the three days after its launch there on Friday.

In Asia, shares gained on Tuesday in morning trade after President Obama made concessions in negotiations to break the U.S. budget impasse, sources said.

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