Daily Data Flow: U.S. Stocks Rise; Beating the Fiscal Cliff; SAC Capital Threatened with Fraud Charges »
U.S. Stocks Rise as Boehner, Obama Fuel Optimism on Talks (Bloomberg)
U.S. stocks rose, erasing an earlier loss for the Standard & Poor’s 500 Index, after comments by Speaker of the House John Boehner and President Barack Obama fueled optimism an agreement can be reached in budget talks. Equities reversed declines as Boehner, an Ohio Republican, said he is optimistic lawmakers engaged in budget talks can “avert this crisis sooner rather than later.” He made his remarks to reporters, while saying he continues to oppose the expiration of tax cuts for top earners and Democrats need to get “serious” on budget cuts. Obama said separately at the White House, “My hope is to get this done before Christmas.”
Companies Shelling Out Billions to Beat the ‘Fiscal Cliff’ (CNBC)
Companies are racing the clock to hand out billions in special dividends before year end—and some of them are taking on debt to do it. Fearing a tripling of dividend tax rates next year, companies have found one-time payouts and early payments of quarterly dividends as a way to beat some of the impact of the “Fiscal Cliff.” Taking advantage of super-low interest rates, companies have been issuing debt at a record rate this month. Some say they plan to use the proceeds to fund dividends and share repurchases. People are taking capital gains now, market commentators recommend it now by saying, “It’s smart.”
SAC Capital Threatened with Fraud Charges: Sources (Reuters)
The U.S. government is threatening to file civil securities fraud charges against SAC Capital Advisors and is tightening the regulatory screws around Steven A. Cohen, the $14 billion hedge fund’s founder and one of the industry’s most famous traders. The move comes a week after a former SAC Capital employee was charged with running the most lucrative insider trading scheme ever in a series of transactions Cohen signed off on.