As the fiscal cliff inches closer, concerned investors, politicians, and Americans in general grow ever more anxious about the possibility that the country could fall over the edge and re-enter a recession. Therefore, many individuals saw John Boehner's comments about agreeing to raise taxes on Americans making $1 million or more as a sign that doomsday may be averted.
Now that Republican politicians have publicly announced that they are willing to allow tax increases to high income earners and the Democrats wanting to tax anyone over the $250,000 threshold, the two sides now have a starting point for at least part of the fiscal negotiations. And while they still have a lot of details to beat out, the markets rallied on the news that progress toward a compromise is being made.
At the end of the day, only three of the Dow's 30 components were in the red. The index closed up 100 points, or 0.76%, and now sits at 13,235.
The biggest loser today was Hewlett-Packard (HPQ -0.36%), which lost 3.66%. The fall came after an analyst from Deutsche Bank released a statement pertaining to the rumors of a possible Carl Icahn investment, saying that if the activist investor were to buy into the company and have it dismantled, shareholder value would be destroyed in the process. The analyst believes the PC company is worth more as a whole than broken up.
Shares of Verizon (VZ 0.03%) also ended the day lower by 0.2%. The fall may have been due to Sprint Nextel's (S) announcement of its acquisition of the minority stake in Clearwire and the company's full spectrum. Sprint's move confirms the idea that the third largest wireless service provider in the U.S. wants to gain market share and become more of a force in the industry.
The only other Dow stock that ended the day in the red was Coca-Cola (KO 0.78%), as shares of the beverage company lost $0.14, or 0.37% of their value today. The slide downward came after the company's largest competitor, PepsiCo (PEP 1.18%), announced that it was changing its Diet Pepsi recipe by adding a very small amount of acesulfame potassium, a sweetener. The company previously only used aspartame, which is sensitive to heat and breaks down more easily. The reason for the change is to help the company provide a more consistent product. Pepsi is also preparing a new add campaign that will attempt to attract new customers to the brand. Pepsi will also be rolling out a new slogan to complement its new Diet Pepsi recipe and its improved consistency: "Love every sip."
