News Column

Stocks Post Solid Gains

Dec 17, 2012

Wall Street stock indices were higher Monday after President Barack Obama met with the leader of opposition Republicans in Congress over the looming "fiscal cliff" deadline.

Major income tax increases and cuts in federal spending will take effect in January unless Congress acts before the end of the year. With an economic bite estimated at $600 billion in 2013 alone, the austerity measures of more than 3 percent of gross domestic product could throw the US back into recession.

As the year-end measures loom, Obama met Monday with John Boehner, speaker of the Republican-led House of Representatives, their third round of talks in less than a week.

The left-leaning Obama has insisted that tax rates be allowed to rise on people earning more than 250,000 dollars a year. Conservative Republicans have argued that higher rates on any income bracket will be detrimental to the economy, and Boehner has offered increased revenue by reducing tax deductions that favour the rich, while seeking savings in pension and health-care programmes to reduce the long-term deficit.

The blue-chip Dow Jones Industrial Average rose 100.38 points, or 0.76 per cent, to 13,235.39. The broader Standard & Poor's 500 Index gained 16.78 points, or 1.19 percent, to 1,430.36. The technology-heavy Nasdaq Composite Index jumped 39.27 points, or 1.32 per cent, to 3,010.6.

The US currency was unchanged against the euro at 75.98 euro cents. The dollar was up against the Japanese currency at 83.87 yen, compared to 83.52 yen on Friday.

Source: Copyright 2012 dpa Deutsche Presse-Agentur GmbH

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