The Dow Jones Industrial Average (^DJI 0.61%) rose moderately today, with a gain of 60 points, or 0.5%, as investors seemed to cheer House Speaker John Boehner's attempt to pass his "Plan B" to avert the fiscal cliff. At the time of writing, House members appeared to be moving toward a vote on the measure, which would keep Bush-era tax cuts for Americans making less than $1 million a year.
President Obama, on the other hand, has demanded that taxes be raised on those with incomes upwards of $250,000 a year. The move seems little more than a publicity ploy by Boehner after Obama threatened to veto the bill yesterday, and Senate Majority Leader Harry Reid also said he wouldn't introduce the measure in the Senate. Considering that, the market's reaction today seems puzzling, though some are hoping the gambit will force the political foes to compromise before 2013 arrives.
Macroeconomic reports today were mixed, as initial unemployment claims and leading indicator reports came in below expectations, but third-quarter GDP was revised up to 3.1% from 2.7%. The Philadelphia Fed's manufacturing index crushed estimates, likely on the recovery from Hurricane Sandy. Existing home sales for November also topped 5 million, beating estimates, as well.
In today's buyout news, we have a bit of a meta-deal, as NYSE Euronext (NYX +0.00%), parent of the New York Stock Exchange and several other exchanges, agreed to be acquired by the Intercontinental Exchange for $8.2 billion. NYSE Euronext shares shot up 34% after the deal was announced.
In after-hours reports, shares of Research in Motion (RIMM +1.30%) were down 10% at the time of this writing, after initially climbing following its earnings release. The drop apparently came on concerns about its service business and cash flow. The Blackberry maker posted an adjusted loss for the quarter of $0.22 a share, better than analyst estimates of $0.35, but its subscriber based declined for the for the first time from 80 million to 79 million. Revenues also fell by 5%.
Nike (NKE 0.62%) shares, meanwhile, jumped 5% in extended-hours trading, despite net income dropping 18% from a year ago. Sales improved by 7%, though, and investors had lowered their expectations due to the recession in Europe and the slowdown in China. Orders for Nike products rose 6% during the period, and profits of $1.14/share easily topped analyst projections of $1.
On the Dow today, most of the 30 components made gains, but Merck (MRK 0.75%) shares fell 3.4%, after its cholesterol drug, Tredaptive, failed to show that it significantly reduced heart disease in a recent study. Analysts are afraid that Merck and other drugmakers will struggle to make new cholesterol pharmaceuticals that are better than existing ones, namely because current drugs are already so effective.
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