NEW YORK — The S&P 500 ended above 2,100 at another record high Tuesday as optimism grew that a debt deal would be reached with Greece and as bond prices sold off.
In a possible sign of progress for Greece, a source told Reuters the country intends to ask for an extension of a loan agreement Wednesday. The report follows a collapse of deal negotiations on Monday, which led to European Union finance ministers pressuring the country to remain in an international financial rescue program.
Late in the session, though, broadcaster ZDF reported the German finance minister said an extension was not up for debate.
Because bonds are so low globally, it creates an interest in equities that perhaps the risk is worth taking to get the higher return.
U.S. Treasury debt prices sold off, pushing benchmark 10-year note yields to seven-week peaks, on expectations the Federal Reserve could bump up rates as early as June. Minutes from the last Fed meeting are due Wednesday.
“We’ve seen more of a risk-on trade,” said Bucky Hellwig, senior vice president at BB&T Wealth Management in Birmingham, Alabama. “Because bonds are so low globally, it creates an interest in equities that perhaps the risk is worth taking to get the higher return.”
Among the S&P 500’s biggest positives, shares of Medical device maker Medtronic Plc, which last month completed the $49.9 billion purchase of Ireland-based Covidien Plc, rose 3.7 percent at $78.07. Medtronic reported a better-than-expected third-quarter profit, driven by solid growth in its cardiac and vascular business.
The Dow Jones industrial average (^DJI) rose 28.23 points, or 0.16 percent, to 18,047.58, the Standard & Poor’s 500 index (^GSPC) gained 3.35 points, or 0.16 percent, to 2,100.34, a record high. The Nasdaq composite (^IXIC) added 5.43 points, or 0.11 percent, to 4,899.27.
Market Movers
U.S.-listed shares of the National Bank of Greece ended up 1.2 percent at $1.63 after falling more than 13 percent earlier in the session.
Shares of Transocean (RIG) recovered to close flat $19.05 a day after the company slashed its dividend and said its chief executive stepped down.
Among decliners, Celsus Therapeutics plummeted 81.4 percent to $1.15 after the company’s lead drug failed a mid-stage study. VBL Therapeutics dropped 65.5 percent to $4.87 after it said it would stop developing its experimental inflammatory drug to fight ulcerative colitis and psoriasis.
A fragile Ukraine truce added uncertainty to the market. In eastern Ukraine, Pro-Russian rebels fought their way into an encircled government bastion and were battling street-to-street, all but dashing hopes that a European-brokered peace deal would end months of conflict.
About 6.2 billion shares changed hands on U.S. exchanges, below the 6.7 billion average for the last five sessions, according to BATS Global Markets.
NYSE decliners outnumbered advancers 1,776 to 1,337, for a 1.33-to-1 ratio; on the Nasdaq, 1,533 issues rose and 1,199 fell, a 1.28-to-1 ratio favoring advancers.
The S&P 500 posted 64 new 52-week highs and 2 new lows; the Nasdaq composite recorded 115 new highs and 22 new lows.
What to watch Wednesday:
At 8:30 a.m. Eastern time, the Labor Department releases the Producer Price Index for January, and the Commerce Department releases housing starts for January.
The Federal Reserve releases industrial production for January at 9:15 a.m.
The Federal Reserve releases minutes from January interest-rate meeting at 2 p.m.
Earnings Calendar
These selected companies are due to release quarterly financial results:
Actavis (ACT)
Avis Budget Group (CAR)
Cinemark Holdings (CNK)
Duke Energy (DUK)
Fidelity National Financial (FNF)
Garmin (GRMN)
Hilton Worldwide (HLT)
Hyatt Hotels (H)
Marathon Oil Corporation (MRO)
Marriott International (MAR)
Questar (STR)
Sabre (SABR)
SolarCity (SCTY)
Williams Cos. (WMB)
To preserve the uniqueness of their island paradise, Hawaii since 2004 has had an "Exceptional Tree" tax allowance. Landowners can deduct up to $3,000 from their income for expenses such as pruning and fertilization for any tree designated as rare, big, old or a combination thereof. That’s per tree. Top-bracket earners taxed at the state’s highest rate (11 percent) would save $330 via the deduction. The work must be done by a certified arborist, and the deduction can be claimed only every third year. Hawaii has had a list of "Exceptional Trees" since 1975, and there are now estimated to be more than a thousand thus designated.
1. Hawaii: Exceptional trees
Maine legislators tax anyone who deals in their official state fruit-blueberries, at the rate of 1.5 cents per pound. The resulting revenues-more than $1.6 million to state coffers in the fiscal year that ended in June 2013-are used to promote the crop and agricultural research.
The state also taxes harvesters and processors of hard-shell clams (known in the state as mahogany quahogs) at $1.25 a bushel, but state revenues for that are much lower.
2. Maine: Blueberries and clams
Alabama is the last in the union to tax a deck of cards as if it were a "vice," like alcohol and tobacco. Taxing decks of cards, associated with gambling, was once fairly common, but most states have since set up separate control boards to regulate liquor and tobacco, and have let the cards slide.
But in Alabama, you’ll still pay a 10 cent sales tax on any pack of cards you purchase. Retailers also have to pay $2 to the state each year for the privilege of selling playing cards.
3. Alabama: Playing cards
Virginia levies a 50-cent excise tax on every lamb or sheep sold in the state. Both the Maine and Virginia taxes are examples of checkoff programs that collect taxes from an industry to fund promotional campaigns for the products. National commodity checkoff programs, authorized by the U.S. Department of Agriculture, have brought you campaigns such as "Beef: It’s What’s for Dinner" and "Got Milk?" But the Virginia program is extremely modest by comparison, having collected only $9,000 in fiscal year 2013. The funds go to the Virginia Sheep Industry Board, which spends them largely on predator control.
4. Virginia: Sheep
In 2013, in part to meet federal pollution-control mandates, Maryland legislators enacted fees on property owners in Baltimore and nine other Maryland counties, aimed at curbing storm water runoff. The fees were meant to fund programs to improve the water quality of the Chesapeake Bay, the largest marine estuary in the U.S. Sounds simple enough, but the way Maryland legislators wrote the law has led to an angry backlash in some corners against this so-called “rain tax.” One way localities calculate the tax is by measuring how much of a landowner’s tract is "impervious" to precipitation seeping into the ground. So the more you’ve developed it with buildings, driveways, tennis courts and the like, the less it will absorb and the more you pay. That’s how the tax is being implemented (through aerial and satellite photos) in Montgomery County, a heavily developed suburb of Washington, and many landowners are up in arms. New Maryland Gov. Larry Hogan, a Republican, campaigned against this tax in his winning 2014 campaign and has introduced legislation to repeal it, though it’s not clear that will fly with Democratic state legislators. Money still needs to be raised to satisfy the federal pollution mandates, but the methods may change.
5. Maryland: The rain?
Kansas is among a bevy of jurisdictions that allows sale of lower-alcohol beer (the term of art is “cereal malt beverage”) in convenience and grocery stores. But Kansas also taxes “3.2” beer differently — and there lies the rub. At a liquor store, all products, including, say, a conventional six-pack of Budweiser (with 5 percent alcohol by volume), are taxed at a special rate of 8 percent. At the convenience store down the street, however, ordinary sales tax is levied on the lower-alcohol, cereal malt beverage bottle of Bud. That often ends up being more than the 8 percent alcohol tax. In Pomona, Kansas, for example, the effective rate on the weaker beer would be 9.7 percent. Go figure.
6. Kansas: Weak beer
When it comes to taxation, the rule is generally the stronger the booze, the higher the tax (that’s why Kansas’s beer tax scheme is an anomaly). California follows that curve, but at 100 proof, you better be ready to pay through the nose. Distilled spirits are taxed at $3.30 a gallon if below 100 proof, or 50 percent alcohol. Go over that, like with Bacardi 151, and the tax doubles to $6.60. Maryland also notes the 100 proof point, but it only adds 1.5 cents per proof, per gallon to the relatively modest liquor tax of $1.50 per gallon, taking the Bacardi 151 to $2.27 per gallon.
7. California: Strong liquor
Entertainment venues pay a business tax to Nevada ranging from 5 percent to 10 percent on admissions fees (and food, drink and merchandise sales) whenever there’s live entertainment going on. There are exemptions, however, including this one, for businesses that provide "instrumental or vocal music, which may or may not be supplemented with commentary by the musicians, in a restaurant, lounge or similar area if such music does not routinely rise to the volume that interferes with casual conversation and if such music would not generally cause patrons to watch as well as listen." So your piano player can play “Feelings” softly and even crack a few jokes, tax-free, for your business. Just make sure they’re not funny enough to attract attention.
8. Nevada: Entertainment
Want to own a plush or fuel-thirsty ride? That’ll cost you extra in New Jersey. Cars that cost $45,000 or more or have a combined EPA fuel-mileage average of 19 or below pay an additional 0.4 percent on top of New Jersey’s 7 percent sales tax.
9. New Jersey: Costly cars with bad mileage
In New Mexico, making it to 100 years has a payoff beyond the chance that Willard Scott will wish you a happy birthday: You don’t have to pay state income tax anymore. If you’ve been physically present in the state for at least six months and a resident of the state on the last day of the year, and you’re not someone’s dependent, you’re eligible. You’ll still need to file, and there are some complications if you’re married and your spouse doesn’t qualify.
10. New Mexico: Centenarians
15 Believe-It-Or-Not Tax Deductions
The Most-Overlooked Tax Deductions
14 IRS Audit Red Flags
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