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At midday: S&P 500 gains as 'fiscal cliff' fears fade

North American stocks rose on Tuesday, driving the benchmark S&P 500 to a two-month high, amid ongoing optimism that Washington is moving toward an agreement on a budget.

At noon, the S&P 500 was up 11 points or 0.8 per cent, to 1442. The blue-chip Dow Jones industrial average was up 80 points or 0.6 per cent, to 13,315. In Canada, the S&P/TSX composite index was up 40 points or 0.3 per cent, to 12,321.

The gains follow signs of progress in the United States, where politicians have been negotiating on a budget that will prevent automatic tax increases and spending cuts in the new year.

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The White House has raised the threshold for tax increases to workers making more than $400,000 (U.S.), up from a $250,000 threshold earlier. Meanwhile, the Republicans have offered tax increases on those making more than $1-million. While that's a big gap, it nonetheless has put tax increases on the table, with some observers expecting a compromise agreement on a $500,000 income threshold.

Within the S&P 500, technology stocks rose 1.3 per cent, financials rose 1 per cent and consumer discretionary stocks rose 0.8 per cent.

Apple Inc. rose 1.6 per cent after Samsung Electronics Ltd. eased back in the patent dispute between the two companies, saying it would drop requests for legal injunctions in five European countries. Apple shares came close to $500 in early trading on Monday, before rebounding.

Within Canada's benchmark index, energy stocks rose 0.9 per cent and financials rose 0.8 per cent. Materials fell 0.7 per cent.

In Europe, the U.K.'s FTSE 100 rose 0.6 per cent and Germany's DAX index rose 0.7 per cent.

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About the Author
Investing Reporter

David Berman has been writing about business and investing since 1995. He has written for a number of magazines, including Canadian Business and MoneySense. He worked at the Financial Post as an investing writer and daily columnist before moving to the Globe and Mail in 2008. More

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