US pending home sales jump to nearly a 6-year high

WASHINGTON (AP) — An index measuring the number of Americans who signed contracts to buy homes in October jumped to nearly its highest level in almost six years. Steady job gains and record-low mortgage rates have made home buying more attractive.
The National Association of Realtors said Thursday that its seasonally adjusted pending home sales index rose 5.2 percent to 104.8 in October. Excluding a few months when the index spiked because of a homebuyer tax credit, that is the highest level since March 2007.
The increase points to healthy sales increases of previously occupied homes in the months ahead. There's generally a one- to two-month lag between a signed contract and a completed sale.
The rise in sales adds to evidence of a steady housing recovery. Builders are more confident in sales and are starting construction on more homes. Home prices are rising on a consistent basis, which encourages more potential buyers to come off the sidelines and purchase homes. And more people may put their homes on the market if they gain confidence that they can sell at a good price.
The report is "another indicator suggesting that the recovery in housing has broadened and has sustained momentum," Michael Gapen, an economist at Barclays Capital, said in a note to clients.
Signed contracts jumped 15.6 percent in the Midwest and rose 5.5 percent in the South. But they fell 1.1 percent in the West and dipped 0.1 percent in the Northeast.
Superstorm Sandy lowered pending sales in the Northeast, the Realtors' group said. The West was hurt by low inventories of available homes.
Mortgage rates remained near record lows this week. The average rate on the 30-year loan was 3.32 percent, mortgage buyer Freddie Mac said, just above 3.31 percent last week, which was the lowest on records dating to 1971.
A big reason for the rebound in housing is that the excess supply of homes that built up before the housing crisis has finally thinned out. The number of previously occupied homes available for sale has fallen to a 10-year low. The inventory of new homes is also near the lowest level since 1963.
At the same time, more people are looking to buy or rent a home after living with relatives or friends during and immediately after the Great Recession.
Those trends are also pushing up home sales and construction. Sales of previously occupied homes are near five-year highs, excluding temporary spikes in 2009 and 2010 when a homebuyer tax credit boosted purchases.
Builders, meanwhile, are more optimistic that the recovery will endure. A measure of their confidence rose to the highest level in six and a half years this month. And builders broke ground on new homes and apartments at the fastest pace in more than four years last month.

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US home sales jump to highest level in 3 years

WASHINGTON (AP) — U.S. sales of previously occupied homes jumped to their highest level in three years last month, bolstered by steady job gains and record-low mortgage rates.
The National Association of Realtors said Thursday that sales rose 5.9 percent to a seasonally adjusted annual rate of 5.04 million in November. That's up from 4.76 million in October.
Previously occupied home sales are on track for their best year in five years. November's sales were the highest since November 2009, when a federal tax credit that was soon to expire spurred sales. Excluding that month, last month's sales were the highest since July 2007.
Sales are up 14.5 percent from a year ago, though they remain below the roughly 5.5 million that are consistent with a healthy market.
Job growth and low home-loan rates have helped drive purchases. Prices are also rising, which encourages more potential buyers to come off the sidelines and purchase homes. And more people may put their homes on the market if they feel confident they can sell at a good price.
In addition, the excess supply of homes that built up during the housing bubble has finally thinned out. The number of previously occupied homes available for sale fell to a 10-year low in October. The supply of new homes is also near its lowest level since 1963.
At the same time, more people are looking to buy or rent a home after living with relatives or friends during and immediately after the Great Recession.
These trends have supported a steady recovery in housing. Builder confidence rose in December for a seventh straight month to the highest level in more than 6½ years, according to a survey released Tuesday by the National Association of Home Builders/Wells Fargo.
The pace of home construction slipped in November, but it was still nearly 22 percent higher than a year earlier. Builders are on track this year to start work on the most homes in four years.
Economists note that the increase in building should lead to more construction jobs, though it hasn't yet done so. That could mean more construction hiring is coming.

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US home sales surge to highest level in 3 years

WASHINGTON (AP) — U.S. sales of previously occupied homes jumped to their highest level in three years last month, bolstered by steady job gains and record-low mortgage rates. The report was the latest sign of a sustained recovery in the housing market.
The National Association of Realtors said Thursday that sales rose 5.9 percent to a seasonally adjusted annual rate of 5.04 million in November. That's up from 4.76 million in October.
Previously occupied home sales are on track for their best year in five years. November's sales were the highest since November 2009, when a federal tax credit that was soon to expire spurred sales. Excluding that month, last month's sales were the highest since July 2007.
Sales are up 14.5 percent from a year ago, though they remain below the roughly 5.5 million that are consistent with a healthy market.
"The report is encouraging, and the positive momentum established in the housing market during 2012 appears likely to continue into 2013," Michael Gapen, an economist at Barclays Capital, said in an email.
Superstorm Sandy delayed some sales in the Northeast, the Realtors' group said. Those delayed purchases will likely close in the coming months, though the increase will be modest, the group said.
Even so, sales rose 6.9 percent in the Northeast last month compared with October. Sales increased 7.2 percent in the Midwest, 7.9 percent in the South and 0.8 percent in the West.
Job growth and low home-loan rates have helped drive purchases. Prices are also rising, which encourages more potential buyers to come off the sidelines and purchase homes. And more people may put their homes on the market if they feel confident they can sell at a good price.
In addition, the excess supply of homes that built up during the housing bubble has finally thinned out. The number of previously occupied homes available for sale fell to nearly an 11-year low in November. The supply of new homes is also near its lowest level since 1963.
At the current sales pace, it would take 4.8 months to exhaust the supply of homes for sale. That's the shortest such span since September 2005.
At the same time, more people are looking to buy or rent a home after living with relatives or friends during and immediately after the Great Recession.
As low supply and rising demand push up prices, builders will likely be encouraged to start work on more homes in coming months, economists said.
"That's a good reason to feel optimistic about housing next year," said Patrick Newport, an economist at IHS Global Insight. "We just don't have enough homes right now, and we need to start building."
Builder confidence rose in December for a seventh straight month to the highest level in more than 6½ years, according to a survey released Tuesday by the National Association of Home Builders/Wells Fargo.
The pace of home construction slipped in November, but it was still nearly 22 percent higher than a year earlier. Builders are on track this year to start work on the most homes in four years.
Economists note that the increase in building should lead to more construction jobs, though it hasn't yet done so. That could mean more construction hiring is coming.

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FedEx: cost plan can counter sluggish growth

NEW YORK (AP) — FedEx is more pessimistic about the U.S. economy than it was three months ago, but more assured of its own ability to grow earnings.
The world's second-largest package delivery company lowered its economic forecast for the U.S., saying that there remains a lot of uncertainty for the company and the country.
Its forecast for the current quarter, which incorporates the critical holiday season, falls short of Wall Street expectations.
But FedEx maintained its forecast for the full fiscal year ending in May, counting on a massive cost reduction plan and a slightly more optimistic view of growth overseas. Shares rose 2.6 percent in afternoon trading.
FedEx Corp. posted earnings of $438 million, or $1.39 per share for the quarter that ending in November, compared with $497 million, or $1.57 per share, a year ago. That was below the $1.41 per share that Wall Street was expecting, according to a poll of analysts by FactSet.
Revenue rose to $11.1 billion from $10.6 billion previously, as the company scaled back its operation to better match demand and some of its raised rates. Analysts forecast revenue of $10.84 billion.
Growth in the company's freight and ground operations boosted results, but FedEx reported "persistent weakness" in its core express network. Operating income in that segment fell 33 percent. FedEx and its larger rival UPS Inc. have both seen consumers and businesses opt for slower shipping options to cut costs.
FedEx said on Wednesday that it expects earnings will be between $1.25 and $1.45 per share in the third quarter. Analysts that follow the company were predicting per-share earnings of $1.45.
The company, based in Memphis, Tenn., also said it expects to earn between $6.20 and $6.60 per share for the year ending in May, excluding any charges from the company's buyout plan. Wall Street is looking for $6.34.
Earlier this month FedEx said it will offer some employees up to two years pay to leave, starting next year. The voluntary program is part of an effort to cut annual costs by $1.7 billion within three years. The plan also includes cutting aircraft and underused assets.

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FedEx says it can grow by cutting costs

NEW YORK (AP) — FedEx may be pessimistic about the U.S. economy, but it's confident about growing its earnings.
The world's second-largest package delivery company, a bellwether for economic health because of the vast number and kinds of shipments it handles, lowered its economic forecast for the U.S., saying there remains a lot of uncertainty for the country.
FedEx maintained its earnings forecast for the full fiscal year ending in May, counting on a massive cost reduction plan and a slightly more optimistic view of growth overseas. Shares rose 84 cents to close at $93.20 Wednesday, even though its forecast for the current quarter, which includes the critical holiday season, falls short of Wall Street expectations.
FedEx Corp. posted earnings of $438 million, or $1.39 per share for the quarter that ended in November, compared with $497 million, or $1.57 per share, a year ago. Superstorm Sandy shaved 11 cents per share off of earnings in this year's quarter, as shipping volumes fell and costs rose.
Revenue rose to $11.1 billion from $10.6 billion a year ago, as the company scaled back its operation to better match demand and some of its raised rates.
Wall Street expected $1.41 per share in the recent quarter on revenue of $10.84 billion, according to FactSet.
Growth in the company's freight and ground operations boosted results, but FedEx reported "persistent weakness" in its core express network. Operating income in that segment fell 33 percent. FedEx and its larger rival UPS Inc. have seen consumers and businesses opt for slower shipping options to cut costs. As a result, FedEx is offering buyouts and shedding aircraft and other assets to reduce its costs and adjust to the new normal.
Earlier this month FedEx said it will offer some employees up to two years pay to leave, starting next year. The voluntary program is part of an effort to cut annual costs by $1.7 billion within three years.
FedEx said on Wednesday that it expects earnings of $1.25 to $1.45 per share in the third quarter. Analysts predicted per-share earnings of $1.45.
The company, based in Memphis, Tenn., also estimated $6.20 and $6.60 per share for the year ending in May, excluding charges from the company's buyout plan. Wall Street is looking for $6.34 per share.

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Burundi tea earnings rise 27 pct in November on high prices

UJUMBURA (Reuters) - Burundi's tea export revenues rose 27 percent in November from the same month last year thanks to a stronger regional market, a tea board official said on Thursday.
The state-run tea board (OTB) said it collected $1.80 million from the sale of 589,907 kg, up from $1.42 million earned in November 2011 from the export of 563,140 kg.
"Supplies of the commodity in the region were low following a fall in overall production, especially with Kenya," Joseph Marc Ndahigeze, OTB's export official, told Reuters.
"This has boosted prices and earnings for Burundi's tea."
Kenya is the top tea producer in the East African region and landlocked Burundi exports 80 percent of its tea through a weekly auction held in Kenya's Indian Ocean port city of Mombasa.
Ndahigeze said the export average price per kg jumped to $3.06 from $2.54 the previous year.
OTB said total export earnings between January and November reached $24.7 million, exceeding the $22.2 million collected in 2011.
Tea is Burundi's second largest hard currency earner after coffee and employs some 300,000 small holder farmers in a nation of 8 million people.

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Jefferies results beat estimates on higher fixed-income revenue

(Reuters) - Jefferies Group Inc reported a higher-than-expected adjusted quarterly profit as the investment bank benefited from higher earnings from its fixed-income unit, and said its business expansion in Asia has started delivering.
The midsized investment bank has been expanding in China and India and recently poached bankers from the Royal Bank of Scotland to expand its business in China.
Jefferies said it also benefited from a pickup in trading across the board in September thanks to fresh stimulus plans from the U.S. Federal Reserve, and that it was gaining market share from larger rivals. The Fed had unveiled a program to purchase $40 billion in mortgage bonds.
The company saw its trading revenue more than double to $293 million from $141 million a year earlier.
"Our competitive position is very strong so across the products within fixed income I think we're gaining market share," Chief Executive Richard Handler said on a post-earnings conference call.
As the first investment bank to report earnings, Jefferies is often viewed as an indicator for larger Wall Street banks such as Goldman Sachs Group and Morgan Stanley .
Jefferies, founded in 1962 in Los Angeles to trade large stock orders away from the New York Stock Exchange, agreed last month to be bought by top shareholder Leucadia National Corp for $2.76 billion in stock.
"Combining our company with an extremely well-capitalized parent will allow us to continue to aggressively add value to our clients," Jefferies said in a statement on Tuesday.
Compensation costs at the company remained high with the company paying 59.9 percent of net revenue to employees, in line with previous periods but higher than the 50 percent industry peers generally target.
Net income rose to $72 million, or 31 cents per share, in the fourth quarter from $48 million, or 21 cents per share, a year earlier.
On an adjusted basis, earnings were 35 cents per share.
Analysts had expected the company to earn 32 cents per share, according to Thomson Reuters I/B/E/S.
Revenue for the quarter rose 39 percent to $769 million, above estimates of $722.6 million. Investment banking revenue rose 8 percent to $283 million.
Jefferies shares, which have risen 12 percent since the Leucadia deal was announced in mid-November, was trading up 2.5 percent at $18.70 on the New York Stock Exchange on Tuesday.

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Oracle 2Q earnings rise 18 pct as tech spending up

SAN FRANCISCO (AP) — Oracle says its latest quarterly earnings rose 18 percent as companies splurged on more software and other technology toward the end of the year.
The results announced Tuesday are an improvement from Oracle's previous quarter, when the company's revenue dipped slightly from a year earlier.
The latest quarter spanned September through November. That makes Oracle the first technology bellwether to provide insights into corporate spending since the Nov. 6 re-election of President Obama and negotiations to avoid the so-called fiscal cliff began to heat up.
Oracle Corp. earned $2.6 billion, or 53 cents per share, in its fiscal second quarter. That compares with net income of $2.2 billion, or 43 cents per share, last year.
Revenue increased 3 percent to $9.1 billion.

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Oracle sees third-quarter profit of 64 to 68 cents per share

BOSTON (Reuters) - Oracle Corp, the world's No. 3 software maker, said it expects to report non-GAAP earnings per share of 64 cents to 68 cents in its fiscal third quarter.
Oracle forecast that third-quarter new software sales and cloud subscriptions sales will rise 3 percent to 13 percent from a year earlier.
The company said its sees third-quarter hardware products sales flat to down 10 percent from a year ago.
Chief Executive Larry Ellison said he expects hardware systems revenue to start growing from the fiscal fourth quarter.
Oracle President Mark Hurd said that Oracle is gaining share against SAP in Europe.

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RIM shares jump in Toronto, rebound from sharp decline

 Shares of Research In Motion Ltd jumped nearly 10 percent on the Toronto Stock Exchange on Thursday, following similar gains in New York on Wednesday, in a rebound from last week's sharp decline.
Last Friday, the volatile stock plunged more than 20 percent after the company said on an earnings conference call that it was rolling out a new fee structure for its services segment, which some investors fear could pressure the high-margin business.
"It got hit so hard after the conference call," said Ed Snyder, an analyst with Charter Equity Research. "People are still fairly optimistic about (BlackBerry 10) coming out in January, so (the rebound is) really just a value play."
The new fee structure overshadowed stronger-than-expected quarterly results.
RIM shares were up 9.7 percent to C$11.42 in midday trade on the Toronto Stock Exchange. The company's Nasdaq-listed stock was down 2 percent to $11.60 after big gains on Wednesday, when Canadian equity markets were closed for Boxing Day.
Through the autumn of 2012, RIM rallied as investors grew optimistic about prospects for its new make-or-break BlackBerry 10 devices, to be formally unveiled January 30. On Thursday, the shares were still up more than 80 percent from the year's low, touched in September.
The Wednesday and Thursday gains also came after several websites posted photos of what they said could be the first BlackBerry 10 phone with a physical keyboard.
Evercore Partners analyst Mark McKechnie said the photos boosted RIM's stock, which he said was depressed from last week's selloff, on a quiet trading day.
"There certainly are folks that believe in the new product cycle," he said. "The whole Wall Street community's been trying to handicap how strong that product cycle will be for RIM."
RIM has said it plans to roll out touchscreen-only devices first, a few weeks before it releases a smartphone with the QWERTY keyboard many longtime BlackBerry users rave about. But some analysts believe devices with hard keyboards will not hit the market until spring.
Management has touted BlackBerry 10's new on-screen keyboard, but some see the company's reputation for building solid, usable physical keyboards as an important competitive advantage as RIM fights for market share against Apple Inc and Samsung Electronics .
McKechnie said volatility is not unusual ahead of big smartphone launches.
"There's so much scale involved in this industry, one way or the other. A successful product versus a failure is going to really change the earnings power of a company," he said.

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A surprisingly good vintage as market logs gains

NEW YORK (AP) — If you'd told investors what was going to happen in 2012 — U.S. economic growth at stall speed, an intensifying European debt crisis, a slowdown in China, fiscal deadlock in Washington, decelerating corporate earnings growth — and asked how the stock market would perform, few would have predicted a good year.
But that's just what they got.
The Dow Jones industrial average, the Standard & Poor's 500 and the Nasdaq composite index all ended the year substantially higher, despite losing ground in the final days of year as concerns about the looming "fiscal cliff" mounted.
The Dow gained 7 percent for the year, its fourth consecutive annual advance, having started the year at 12,217. The S&P 500, which started the year at 1,257, is up 13 percent, beating the 7.8 percent average annual gain of the past 20 years. The Nasdaq also logged a better-than-average gain, 16 percent.
Including dividends, the total return on the S&P 500 index was even better: 16 percent.
Financial companies led the gains among S&P 500 stocks, advancing 26 percent, as banks continued their restructuring efforts after the recession. Bank of America more than doubled, gaining $6.05 to $11.61 and Citigroup advanced $13.25, or 50 percent, to $39.56. Utilities, the best-performing industry group last year, was the only sector of 10 industry groups in the index to decline, dropping 2.9 percent.
"There's been a lot thrown at this market, and it's proven to be very resilient," said Gary Flam, a portfolio manager at Bel Air Investment Advisors in California. "Here we are at the end of the year, and it's still relatively strong."
Stocks started the year on a tear, with optimism about an improving job market and a broader economic recovery providing the backdrop to the S&P 500's best first-quarter rally in 14 years.
The index advanced 12 percent by the end of March, closing the quarter at 1,408, its highest in almost four years, with financial companies and technology firms leading the charge. The Dow ended the first quarter at 13,212, logging an 8 percent gain.
Apple was one of the star performers of the first quarter and was probably the year's most talked-about company.
The popularity of the iPhone and iPad led to staggering sales growth that helped push its stock up 48 percent to almost $600 at the end of March. Apple also announced a dividend and overtook Exxon Mobil as the U.S.'s most valuable company.
At the start of the second quarter, the intensifying European debt crisis and concerns about the impact that it would have on global economic growth prompted a sell-off.
By the start of June, U.S. stocks had given up the year's gains. Borrowing costs for Spain surged and investors fretted over the outcome of Greek elections that had the potential to pull the euro currency bloc apart.
The outlook for growth in China, the world's second-largest economy, also began to weigh on investors' minds. Economic growth there slowed to 8.1 percent in the first quarter as export demand waned, and investors worried that it would keep falling.
The Dow fell as low as 12,101 June 4. The S&P dropped to 1,278 June 1.
The second quarter was also marred by Facebook's initial public offering.
The stock sale was one of the most keenly anticipated initial public offerings in years, but investors didn't "like" the $16 billion market debut. The social network priced its IPO at $38 per share, and the stock started to fall soon after the first day of trading on concern about the company's mobile strategy.
Facebook closed as low as $17.73 on Sept. 4 before recovering some of the ground it lost to close the year at $26.62.
Company earnings reports were also starting to make uncomfortable reading for investors. Earnings growth for S&P 500 companies fell as low as 0.8 percent in the second quarter, according to S&P Capital IQ data.
The stock market only recovered its poise after the European Union put together loans to bail out Spain's banks on June 10 and the head of the European Central Bank, Mario Draghi, pledged to do "whatever it takes" to save the euro.
Speculation that the Federal Reserve was set to provide the economy with more stimulus to prevent it from slipping back into recession also bolstered stocks.
The rally even survived a blip when a software glitch at trading firm Knight Capital threw stock prices into chaos Aug. 1.
The firm said the problem was triggered by new trading software it installed. Erroneous orders were sent to 140 stocks listed on the New York Stock Exchange, causing sudden price swings and surging trading volume.
Apple launched the iPhone 5, the latest version of its smartphone, in September, and the company's stock climbed to a record close of $702.10 on Sept. 19. That gave Apple a market value of $658 billion, and many analysts predicted more gains lay ahead.
By the time Fed Chairman Ben Bernanke announced Sept. 13 that the U.S. central bank would start a third round of its bond-purchase program, which is intended to push longer term interest rates lower and encourage borrowing and investment, the S&P 500 had surged 14 percent from its June 1 low. A day later, the index peaked at five-year high of 1,466. The Dow Jones reached its peak for the year of 13,610, Oct. 5.
As is often the case on Wall Street, investors "bought the rumor and sold the fact," and quickly turned their attention to the challenges that lay ahead.
Analysts had also been cutting their outlook for growth in the final quarter of the year. At the start of the second quarter, estimated earnings growth for the period was 15.7 percent. That forecast had fallen to 3.4 percent by Dec. 27.
"One of the blessings that supported the stock market's moves in prior years was earnings growth," said Lawrence Creatura, a portfolio manager at Federated Investors. "That's true this year, but at a decelerating rate. It's not gone unnoticed that earnings growth is slowing, and many forecasts now include a full stall."
Apple's halo also began to slip in the final three months of the year. Its iPad Mini tablet, launched Nov. 2, met with lukewarm reviews, there were hints of unrest among its executive ranks. Investors began to fret that the intensifying competition in the smartphone market would crimp Apple's profits. The stock tumbled, and despite rallying in recent days is still down 27 percent from its September peak.
The year's final twist came in Washington.
Stocks wavered ahead of a presidential election that at times seemed too close to call, and while President Barack Obama ultimately reclaimed the White House by a comfortable margin, the Republicans retained control of the House.
The divided government set the stage for a tense end to the year as Democrats and Republicans sought to thrash out a budget plan that would avoid the U.S. falling off the "fiscal cliff," a series of tax hikes and government spending cuts that economists say would push the economy back into recession.
Initially, markets fell as much as 5 percent in the 10 days after the elections as investors worried that a divided government would not be able to agree on a budget plan to cut the U.S. deficit.
While the S&P 500 managed to recoup those losses by December on optimism that a deal would be reached, some investors are still urging caution. Any agreement will still be "ill-tasting medicine" to the economy, as it will almost certainly involve both spending cuts and tax hikes, says Joe Costigan, director of equity research at Bryn Mawr Trust Company.
"The question is, how much will the drag from the government be offset by business and personal spending," says Costigan. "The market has reasonable expectations for growth priced in, so I don't think we're going to see a big run-up."

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Stocks surge after last-minute budget deal reached

Stocks are opening sharply higher on Wall Street after lawmakers averted sweeping cuts in government spending and with a last-minute budget deal.
The Dow Jones industrial average jumped 232 points to 13,336 shortly after the opening bell Tuesday, the first trading day of 2013. That's a gain of 1.8 percent.
The Standard & Poor's 500 index shot up 29 points, or 2 percent, to 1,455. The Nasdaq composite rose 82 points, or 2.7 percent, to 3,102.
Investors have been keeping a close eye on the budget stalemate in Washington and were relieved that a deal was reached. However the late-night budget agreement leaves many issues unresolved and it remained unclear how long the market rally would last. Next up is a fight over the government's borrowing limit.

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'Fiscal cliff' deal sends markets shooting higher

 The "fiscal cliff" compromise, for all its chaos and controversy, was enough to send the stock market shooting higher Wednesday, the first trading day of the new year.
All the major U.S. stock indexes swelled by at least 2 percent. For the Dow Jones industrial average, up 263 points soon after the market opened, it was the biggest surge in six months.
Stocks around the world also leapt higher. The major indexes in Britain, France and Germany rose more than 2 percent, and Greece and Spain were up by more than 3 percent. Stocks in Asia also surged.
In the U.S., the rally was extraordinarily broad. For every stock that fell on the New York Stock Exchange, roughly 18 rose.
The Dow was up 263 at 13,369 after the first 45 minutes of trading. The S&P 500 was up 30 to 1,456. The Nasdaq composite was up 82 to 3,102.
The yield on the 10-year Treasury note rose sharply, to 1.84 percent from 1.75 percent, as investors dumped safe harbor investments like U.S. government bonds and plowed money into stocks. The dollar fell against the euro and prices for oil and other commodities rose.
Late Tuesday night the U.S. House of Representatives passed a budget bill meant to ward off the "fiscal cliff." Many House Republicans balked at voting for the bill because they wanted a deal that did more to cut government spending.
Because lawmakers didn't have a budget compromise in place when the new year started on Tuesday, the U.S. technically did go over the "fiscal cliff," meaning tax increases and government spending cuts automatically kicked in that day. Some analysts worried that the combination would kick the U.S. back into recession. But the bill passed Tuesday night by the House will prevent the "cliff" from taking hold. It already has Senate approval, and now awaits a signature from President Barack Obama.
Some investors, even as they watched the stock market leap higher, cautioned that the euphoria could be short-lived. The deal leaves a host of questions unresolved. Notably, the core issue of the "fiscal cliff" standoff in Washington has been the country's long-term plan for trimming its debt, and the deal doesn't include any significant deficit-cutting agreement.
Next up is what could turn into a vicious fight over the debt ceiling, or how much the government is allowed to borrow. And the U.S. could still get its debt rating downgraded by one of the ratings agencies. The stock market plunged in August 2011 after Standard & Poor's cut the U.S. government's credit rating.
Some investors also noted that the "fiscal cliff," which has dominated headlines for weeks, is only masking serious problems punctuating the world economy, including the still-unsolved European debt crisis and middling growth for the U.S. economy. Wednesday, the president of debt-wracked Cyprus said he'd refuse to sell government-owned companies, a provision that the country's bailout deal says it must at least consider.
Among stocks making big moves, Zipcar shot up 48 percent, or $3.96, to $12.20 after the company said it had agreed to be acquired by Avis. Avis rose $1.16 to $20.98. Zipcar has a business model that's popular with drivers, allowing them to rent cars for just a few hours at a time. The company has struggled to win over investors, however, and its stock plunged nearly 39 percent in 2012. Avis rose 84 percent in the same period.

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Nigerian stocks continue gains, up 1.5 pct on banks

LAGOS (Reuters) - Nigerian stocks rose 1.5 percent on Wednesday in thin trade, led by heavy weight banks, adding to optimism that a surge in share prices last year will continue into 2013.
The index of Nigeria's top-10 banks on Wednesday gained 3.5 percent to help lift the all-share index up 424 points to 28,502 points by 1404 GMT.
Sub-Saharan Africa's second biggest index crossed a 28,000 point psychological level on Monday, hitting a 32-month high to close as the second best performing African stock market after Uganda, rising 35.5 percent in 2012.
Nigerian stocks recovered last year after falling 16 percent in 2011 but the market is still less than half the value it was prior to the 2008 collapse, which wiped off 60 percent of stock values and coincided with a banking crisis.
The index rose 70 percent in 2007.
Skye Bank rose the maximum 10 percent allowed for stock eligible for market-making on Wednesday, while Diamond Bank and FCMB each rose over 9 percent.

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Oil down slightly as fiscal-cliff talks continue

The price of oil fell slightly Friday, as the stock market drifted lower and efforts continued in Washington to strike a budget deal before the year-end deadline.
U.S. benchmark crude fell 7 cents to finish at $90.80 a barrel.
Hopes that a budget compromise might be reached were still alive as congressional leaders met with President Barack Obama at the White House. The Republican-dominated House is set to meet Sunday and stay in session until Jan. 2, the day before the new Congress is sworn in. Without a budget deal, automatic tax hikes and government spending cuts could send the economy into recession, economists say.
Traders are also weighing rising energy supplies.
Phil Flynn, of the Price Futures Group, said that a government report Friday showed U.S. oil production hit its highest point since March of 1993, at nearly 7 million barrels per day.
The Energy Department's Energy Information Administration said that U.S. crude supplies fell by 600,000 barrels last week but were still 13 percent above year-ago levels. Analysts expected a drop of 2 million barrels, according to Platts, the energy information arm of McGraw-Hill Cos. Supplies at the crude delivery hub in Cushing, Okla., rose to an all-time high of 49.2 million barrels, more than 20 million barrels above year-ago levels.
Gasoline supplies increased by 3.8 million barrels, well above the 250,000-barrel increase that analysts forecast. Demand for gasoline at the wholesale level is nearly 3 percent lower than a year ago.
Flynn also said traders were looking beyond the fiscal cliff to supply changes in the new year. Next month the pipeline flow between Cushing and Texas will increase. That means more buyers can access that oil, so Flynn expects higher prices for crude. And with much of the nation facing its real first cold snap of the winter — with the coldest temperatures in two years — Flynn said many traders expect more demand for petroleum products.
In other energy futures trading on the Nymex:
— Wholesale gasoline fell 2 cents to end at $2.80 a gallon.
— Heating oil fell 3 cents to finish at $3.04 a gallon.
— Natural gas rose 6 cents to end at $3.47 per 1,000 cubic feet.
In London, Brent crude, used to price various kinds of foreign oil, fell 18 cents to finish at $110.62 a barrel on the ICE Futures exchange.

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Stocks drop as hope for a budget deal slips away

 Stocks are dropping again on Wall Street as investors lose hope that Washington will meet a self-imposed deadline for reaching a budget deal by year-end.
The five-day losing streak for the Dow Jones industrial average was the longest since July.
The Dow lost 158 points to close at 12,938 Friday.
The Standard & Poor 500 index fell 15 points to 1,402 and the Nasdaq dropped 25 points to 2,960.
The market was down all day. The losses accelerated in the final 20 minutes of trading as reports circulated that President Barack Obama would not make a new budget proposal in a meeting with congressional leaders.
Two stocks fell for every one that rose on the New York Stock Exchange. Volume was lower than the recent average at 2.4 billion shares.

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Wall Street ends sour week with 5th straight decline

- Stocks fell for a fifth straight day on Friday, dropping 1 percent and marking the S&P 500's longest losing streak in three months as the federal government edged closer to the "fiscal cliff" with no solution in sight.
President Barack Obama and top congressional leaders met at the White House to work on a solution for the draconian debt-reduction measures set to take effect beginning next week. Stocks, which have been influenced by little else than the flood of fiscal cliff headlines from Washington in recent days, extended losses going into the close with the Dow Jones industrial average and the S&P 500 each losing 1 percent, after reports that Obama would not offer a new plan to Republicans. The Dow closed below 13,000 for the first time since December 4.
"I was stunned Obama didn't have another plan, and that's absolutely why we sold off," said Mike Shea, managing partner at Direct Access Partners LLC in New York. "He's going to force the House to come to him with something different. I think that's a surprise. The entire market is disappointed in a lack of leadership in Washington."
In a sign of investor anxiety, the CBOE Volatility Index <.vix>, known as the VIX, jumped 16.69 percent to 22.72, closing at its highest level since June. Wall Street's favorite fear barometer has risen for five straight weeks, surging more than 40 percent over that time.
The Dow Jones industrial average <.dji> dropped 158.20 points, or 1.21 percent, to 12,938.11 at the close. The Standard & Poor's 500 Index <.spx> lost 15.67 points, or 1.11 percent, to 1,402.43. The Nasdaq Composite Index <.ixic> fell 25.59 points, or 0.86 percent, to end at 2,960.31.
For the week, the Dow fell 1.9 percent. The S&P 500 also lost 1.9 percent for the week, marking its worst weekly performance since mid-November. The Nasdaq finished the week down 2 percent. In contrast, the VIX jumped 22 percent for the week.
Pessimism continued after the market closed, with stock futures indicating even steeper losses. S&P 500 futures dropped 26.7 points, or 1.9 percent, eclipsing the decline seen in the regular session.
All 10 S&P 500 sectors fell during Friday's regular trading, with most posting declines of 1 percent, but energy and material shares were among the weakest of the day, with both groups closely tied to the pace of growth.
An S&P energy sector index <.gspe> slid 1.8 percent, with Exxon Mobil down 2 percent at $85.10, and Chevron Corp off 1.9 percent at $106.45. The S&P material sector index <.gspm> fell 1.3 percent, with U.S. Steel Corp down 2.6 percent at $23.03.
Decliners outnumbered advancers by a ratio of slightly more than 2 to 1 on the New York Stock Exchange, while on the Nasdaq, two stocks fell for every one that rose.
"We've been whipsawing around on low volume and rumors that come out on the cliff," said Eric Green, senior portfolio manager at Penn Capital Management in Philadelphia, who helps oversee $7 billion in assets.
With time running short, lawmakers may opt to allow the higher taxes and across-the-board federal spending cuts to go into effect and attempt to pass a retroactive fix soon after the new year. Standard & Poor's said an impasse on the cliff wouldn't affect the sovereign credit rating of the United States.
"We're not as concerned with January 1 as the market seems to be," said Richard Weiss, senior money manager at American Century Investments, in Mountain View, California. "Things will be resolved, just maybe not on a good timetable, and any deal can easily be retroactive."
Trading volume was light throughout the holiday-shortened week, with just 4.46 billion shares changing hands on the New York Stock Exchange, the Nasdaq and NYSE MKT on Friday, below the daily average so far this year of about 6.48 billion shares. On Monday, the U.S. stock market closed early for Christmas Eve, and the market was shut on Tuesday for Christmas. Many senior traders were absent this week for the holidays.
Highlighting Wall Street's sensitivity to developments in Washington, stocks tumbled more than 1 percent on Thursday after Senate Majority Leader Harry Reid warned that a deal was unlikely before the deadline. But late in the day, stocks nearly bounced back when the House said it would hold an unusual Sunday session to work on a fiscal solution.
Positive economic data failed to alter the market's mood.
The National Association of Realtors said contracts to buy previously owned U.S. homes rose in November to their highest level in 2-1/2 years, while a report from the Institute for Supply Management-Chicago showed business activity in the U.S. Midwest expanded in December.
"Economic reports have been very favorable, and once Congress comes to a resolution, the market should resume an upward trend, based on the data," said Weiss, who helps oversee about $125 billion in assets. "All else being equal, we see any further decline as a buying opportunity."
Barnes & Noble Inc rose 4.3 percent to $14.97 after the top U.S. bookstore chain said British publisher Pearson Plc had agreed to make a strategic investment in its Nook Media subsidiary. But Barnes & Noble also said its Nook business will not meet its previous projection for fiscal year 2013.
Shares of magicJack VocalTec Ltd jumped 10.3 percent to $17.95 after the company gave a strong fourth-quarter outlook and named Gerald Vento president and chief executive, effective January 1.
The U.S.-listed shares of Canadian drugmaker Aeterna Zentaris Inc surged 13.8 percent to $2.47 after the company said it had reached an agreement with the U.S. Food and Drug Administration on a special protocol assessment by the FDA for a Phase 3 registration trial in endometrial cancer with AEZS-108 treatment.

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Wall St Week Ahead - Cliff may be a fear, but debt ceiling much scarier

 Investors fearing a stock market plunge - if the United States tumbles off the "fiscal cliff" next week - may want to relax.
But they should be scared if a few weeks later, Washington fails to reach a deal to increase the nation's debt ceiling because that raises the threat of a default, another credit downgrade and a panic in the financial markets.
Market strategists say that while falling off the cliff for any lengthy period - which would lead to automatic tax hikes and stiff cuts in government spending - would badly hurt both consumer and business confidence, it would take some time for the U.S. economy to slide into recession. In the meantime, there would be plenty of chances for lawmakers to make amends by reversing some of the effects.
That has been reflected in a U.S. stock market that has still not shown signs of melting down. Instead, it has drifted lower and become more volatile.
In some ways, that has let Washington off the hook. In the past, a plunge in stock prices forced the hand of Congress, such as in the middle of the financial crisis in 2008.
"If this thing continues for a bit longer and the result is you get a U.S. debt downgrade ... the risk is not that you lose two-and-a-half percent, the risk is that you lose ten and a half," said Jonathan Golub, chief U.S. equity strategist at UBS Equity Research, in New York.
U.S. Treasury Secretary Tim Geithner said this week that the United States will technically reach its debt limit at the end of the year.
INVESTORS WARY OF JANUARY
The White House has said it will not negotiate the debt ceiling as in 2011, when the fight over what was once a procedural matter preceded the first-ever downgrade of the U.S. credit rating. But it may be forced into such a battle again. A repeat of that war is most worrisome for markets.
Markets posted several days of sharp losses in the period surrounding the debt ceiling fight in 2011. Even after a bill to increase the ceiling passed, stocks plunged in what was seen as a vote of "no confidence" in Washington's ability to function, considering how close lawmakers came to a default.
Credit ratings agency Standard & Poor's lowered the U.S. sovereign rating to double-A-plus, citing Washington's legislative problems as one reason for the downgrade from triple-A status. The benchmark S&P 500 dropped 16 percent in a four-week period ending August 21, 2011.
"I think there will be a tremendous fight between Democrats and Republicans about the debt ceiling," said Jon Najarian, a co-founder of online brokerage TradeMonster.com, in Chicago.
"I think that is the biggest risk to the downside in January for the market and the U.S. economy."
There are some signs in the options market that investors are starting to eye the January period with more wariness. The CBOE Volatility Index <.vix>, or the VIX, the market's preferred indicator of anxiety, has remained at relatively low levels throughout this process, though on Thursday it edged above 20 for the first time since July.
More notable is the action in VIX futures markets, which shows a sharper increase in expected volatility in January than in later-dated contracts. January VIX futures are up nearly 23 percent in the last seven trading days, compared with a 13 percent increase in March futures and an 8 percent increase in May futures. That's a sign of increasing near-term worry among market participants.
The CBOE Volatility Index closed on Friday at 22.72, gaining nearly 17 percent to end at its highest level since June as details emerged of a meeting on Friday afternoon of President Barack Obama with Senate and House leaders from both parties where the president offered proposals similar to those already rejected by Republicans. Stocks slid in late trading and equity futures continued that slide after cash markets closed.
"I was stunned Obama didn't have another plan, and that's absolutely why we sold off," said Mike Shea, a managing partner and trader at Direct Access Partners LLC, in New York.
Obama offered hope for a last-minute agreement to avoid the fiscal cliff after a meeting with congressional leaders, although he scolded Congress for leaving the problem unresolved until the 11th hour.
"The hour for immediate action is here," he told reporters at a White House briefing. "I'm modestly optimistic that an agreement can be achieved."
The U.S. House of Representatives is set to convene on Sunday and continue working through the New Year's Day holiday. Obama has proposed maintaining current tax rates for all but the highest earners.
Consumers don't appear at all traumatized by the fiscal cliff talks, as yet. Helping to bolster consumer confidence has been a continued recovery in the housing market and growth in the labor market, albeit slow.
The latest take on employment will be out next Friday, when the U.S. Labor Department's non-farm payrolls report is expected to show jobs growth of 145,000 for December, in line with recent growth.
Consumers will see their paychecks affected if lawmakers cannot broker a deal and tax rates rise, but the effect on spending is likely to be gradual.
PLAYING DEFENSE
Options strategists have noted an increase in positions to guard against weakness in defense stocks such as General Dynamics because those stocks would be affected by spending cuts set for that sector. Notably, though, the PHLX Defense Index is less than 1 percent away from an all-time high reached on December 20.
This underscores the view taken by most investors and strategists: One way or another, Washington will come to an agreement to offset some effects of the cliff. The result will not be entirely satisfying, but it will be enough to satisfy investors.
"Expectations are pretty low at this point, and yet the equity market hasn't reacted," said Carmine Grigoli, chief U.S. investment strategist at Mizuho Securities USA, in New York. "You're not going to see the markets react to anything with more than a 5 (percent) to 7 percent correction."
Save for a brief 3.6 percent drop in equity futures late on Thursday evening last week after House Speaker John Boehner had to cancel a scheduled vote on a tax-hike bill due to lack of Republican support, markets have not shown the same kind of volatility as in 2008 or 2011.
A gradual decline remains possible, Golub said, if business and consumer confidence continues to take a hit on the back of fiscal cliff worries. The Conference Board's measure of consumer confidence fell sharply in December, a drop blamed in part on the fiscal issues.
"If Congress came out and said that everything is off the table, yeah, that would be a short-term shock to the market, but that's not likely," said Richard Weiss, a Mountain View, California-based senior money manager at American Century Investments.
"Things will be resolved, just maybe not on a good time table. All else being equal, we see any further decline as a buying opportunity.

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Stocks open lower as US budget deadline nears

 Stocks are falling again on Wall Street as Washington leaders blame each other for an impasse over the budget that seems less and less likely to be resolved before a year-end deadline.
That's when a series of across-the-board government spending cuts and tax increases kick in, an event that has become known as the "fiscal cliff."
The market is on track for its fifth consecutive decline as the political gridlock continues and investors fret about the fallout it will have on the fragile economic recovery in the U.S.
The Dow Jones industrial average fell 71 points to 13,024 shortly after the opening of trading Friday.
The Standard & Poor's 500 index fell eight points to 1,409 and the Nasdaq composite fell 16 to 2,970.

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Oracle 2Q earnings rise 18 pct as tech spending up

Oracle 2Q earnings rise 18 pct as tech spending up
Oracle says its latest quarterly earnings rose 18 percent as companies splurged on more software and other technology toward the end of the year.
The results announced Tuesday are an improvement from Oracle's previous quarter, when the company's revenue dipped slightly from a year earlier.
The latest quarter spanned September through November. That makes Oracle the first technology bellwether to provide insights into corporate spending since the Nov. 6 re-election of President Obama and negotiations to avoid the so-called fiscal cliff began to heat up.
Oracle Corp. earned $2.6 billion, or 53 cents per share, in its fiscal second quarter. That compares with net income of $2.2 billion, or 43 cents per share, last year.
Revenue increased 3 percent to $9.1 billion.
Oracle is based in Redwood Shores, Calif.

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