* Top Republican lawmaker optimistic can avert fiscal crisis
* U.S. new home sales dip, prior estimate revised lower
* Obama to meet with CEOs from Goldman, Deloitte
* Costco to pay $7 special dividend on Dec 18
* Dow up 0.6 pct, S&P 500 up 0.4 pct, Nasdaq up 0.3 pct
By Edward Krudy
NEW YORK, Nov 28 U.S. stocks turned higher on
Wednesday on investors' hopes that a compromise could be reached
to avoid the "fiscal cliff" after comments from U.S. House
Speaker John Boehner and President Barack Obama.
Shares of Costco Wholesale Corp jumped 5.5 percent
to $101.81 after the retailer became the latest company to
announce a special dividend in case taxes jump next year.
The market sharply pared losses in volatile late morning
trading after Boehner, the top Republican in Congress, said he
was optimistic that a deal on the "fiscal cliff" to avert large
tax hikes and spending cuts could be reached. That helped
reverse a slide of 1 percent.
Adding to the more positive tone, the president, speaking
later in the day, said he hoped to get a deal done before
For weeks now, the market has been swinging back and forth on
headlines from Washington. Wednesday's gyrations served to once
again highlight the extent that the impasse is affecting the
market and the likelihood of more volatility to come.
"There's only one issue in front of the financial markets,
and it's the debate on the fiscal cliff," said Jack De Gan,
chief investment officer of Harbor Advisory Corp in Portsmouth,
"That's the only issue out there, and I think in the short
term, there's not much that we can do other than watch, and try
to anticipate what's going to happen."
One possible result of the deficit-reduction talks is a rise
in the tax rate on dividends, prompting some companies to issue
special dividends or move up plans for dividends.
The latest example is retailer Costco, which said it will
pay a special dividend of roughly $3 billion to investors - the
largest payout so far from any company ahead of a likely
increase in the dividend tax. Costco also posted monthly
same-store sales that beat forecasts. Costco's
stock hit an intraday high of $102.14, close to its 2012 high of
$104.43 set on Oct. 10.
The Dow Jones industrial average gained 79.75 points,
or 0.62 percent, to 12,957.88. The Standard & Poor's 500 Index
rose 5.87 points, or 0.42 percent, to 1,404.81. The
Nasdaq Composite Index added 9.04 points, or 0.30
percent, to 2,976.83.
Knight Capital Group Inc shares jumped 14.1 percent
to $3.39 on news that Getco LLC has sent a proposal for a merger
between Getco and Knight Capital at a price of $3.39 per share,
according to a regulatory filing.
Obama is meeting on Wednesday at the White House with chief
executives from top corporations, including Goldman Sachs
, Deloitte LLP and Caterpillar Inc, to discuss
U.S. fiscal problems.
"While there's little that the president and vice president
could do at today's meeting to improve moods in America's corner
office, we still believe a legislative compromise will be
reached before 'fiscal cliff' detonates," said Jack Ablin, chief
investment officer of BMO Private Bank, in Chicago.
"In the meantime, we expect daunting headlines and emotional
On the earnings front, Green Mountain Coffee Roasters Inc
forecast quarterly and full-year earnings well ahead of
analysts' expectations, helped by an expanded lineup of
single-serve coffee makers and drinks. The company's stock
surged 24 percent to $35.91.
The S&P 500's drop of 1 percent in the morning was partly
caused by data that showed U.S. single-family home sales fell in
October, casting a shadow over what has been one of the brighter
spots in the U.S. economy.
Housing stocks fell after the data. The PHLX housing index
slipped 0.5 percent. D.R. Horton Inc, the biggest
U.S. home builder, fell 1.2 percent to $19.34.