Stocks rise Tuesday with the announcement that President Obama and Republican
lawmakers negotiated a deal that would extend the Bush era tax cuts two years.
The deal will also extend unemployment benefits for 13 months, lower the payroll
tax two percentage points for a year, continue tax breaks for students and
families and allow businesses to write off all investments made next year.
Analysts anticipate the deal will face some opposition from Democrats with the
report that the compromise conceded to many Republican demands. One of the
points of contention centered on estate taxes. The tax will be set at 35% for
two years on inheritances worth over $5 million. Democrats has expected the rate
to be higher and apply to estates over $3.5 million. Treasury prices declined
Tuesday as a result of the extended tax cuts and the 10-year yield rose, above
3.0%, for the first time since July. The Treasury prices and yields move in
opposite directions. At close the three major market indexes were mixed. Dow
dropped 3.03 points to 11,359.16. Nasdaq gained 3.57 points to 2,598.49. S&P 500
was up 0.63 points to 1,223.75. The Treasuries 10-year yield gained 0.22 to
3.16%. Oil was down .66 to $88.16 a barrel. Gold dropped 7.10 to $1409.00 an
ounce. Silver gained 0.042 to $29.78 an ounce. Author: Pamela Frost
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