Stocks end higher on fiscal cliff optimism

“Stocks enjoyed a nice pop Tuesday, as investors were reassured by signs that a fiscal cliff deal may be taking shape,” Maureen Farrell reports for CNNMoney.

“House Speaker John Boehner’s suggestion that he was open to higher tax rates on the wealthiest Americans was described as ‘progress’ by the White House,” Farrell reports. “President Barack Obama responded to the offer with his own compromise on both tax increases and spending cuts. ‘There’s an overriding belief now that we will get a deal done in 2012,’ said Peter Boockvar, an equity strategist at Miller Tabak.”

Farrell reports, “The Dow Jones Industrial Average and the S&P 500 closed up between 0.9% and 1.1% respectively. Apple rose nearly 3%, helping Nasdaq to a 1.5% gain for the day. ”

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Lu Wang and Rita Nazareth report for Bloomberg News, “Obama lowered his tax revenue demand by $200 billion and offered to start tax rate increases at $400,000 in income instead of $250,000, moving closer to a budget deal with House Speaker John Boehner.”

“The president’s revised plan would raise $1.2 trillion in taxes in the next decade and cut $1.22 trillion in spending, said a person familiar with the talks,” Wang and Nazareth report. “Obama wants a large enough debt ceiling increase for the next two years and would accept a new inflation yardstick that would reduce Social Security cost-of-living increases, said the person, who sought anonymity.”

Wang and Nazareth report, “Boehner said he will push a budget ‘plan B’ measure that will include tax increases on income of more than $1 million a year, while he continues to negotiate with the president.”

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