Stocks move higher as budget talks progress
Indexes opened higher following the news that Boehner, a Republican, offered $1 trillion in higher tax revenue over 10 years and an increase on the top tax rate for people making $1 million per year, to 39.6 percent from 35 percent. The market moved higher still after news crossed shortly before noon that Boehner went to the White House to meet with President Barack Obama.
Wall Street has been relatively calm in recent weeks, but David Kelly, chief global strategist for J.P. Morgan Funds, said that by Friday the market will be "squarely focused on what is or is not happening in Washington."
He suggested in a note to clients that the markets will not have "priced in" any outcome, "setting the stage for a market rally with an agreement and a slump with stalemate."
Clearwire slid 46 cents, to $2.91, after Sprint announced terms of its buyout deal for the wireless Internet access company. Sprint's price of $2.97 per share was below Clearwire's closing stock price Friday.
Japanese stocks rose after the country's Liberal Democratic Party regained power following a landslide election victory.
Brian Singer, partner at William Blair, a Chicago-based asset management firm, said investors were encouraged by the outcome, which gave the conservative party overwhelming control of Parliament. The Liberal Democrats have promised greater economic stimulus spending and more action to end a destructive cycle of price declines, or deflation.
The note on the 10-year Treasury bond rose 7 basis points to 1.78 percent.
Other stocks making big moves:
—American International Group rose $1.01, or 3 percent, to $34.95 after the insurer said it was selling its remaining stake in the life insurer AIA Group. The Wall Street Journal said AIG may raise as much as $6.5 billion from the sale. AIG avoided collapse in 2008 with $182 billion in support from the U.S. government — the biggest of the Wall Street bailout packages — after suffering massive losses from investments in derivatives.
—Tenet Healthcare Co. gained 55 cents, or 1.8 percent, to $31.38 after Deutsche Bank raised its recommendation on the stock to "buy" from "hold." The bank cited Tenet's "compelling" business and financial outlook over the next 12 to 24 months.