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Stocks edge up but fiscal fears linger

David Russell (david.russell@optionmonster.com)

Stock futures are up slightly, following modest gains in Europe, as the market awaits a resolution on the looming fiscal cliff.

The S&P 500 is higher by about one-tenth of a percent. It's been climbing for the last two weeks after bouncing from an early-November pullback and is now in the middle of its trading range for the second half of the year.

While economic fundamentals have been positive, with improving employment and housing, investors are now worried about the danger of higher tax rates and less government spending on Jan. 1. So far, there have been few signs of a deal in Washington.

Sentiment was also positive overseas, with European and Asian indexes advancing by more than half a percent. Germany's lower house voted strongly in favor of an aid package for Greece, maintaining the momentum toward resolution of the Mediterranean country's debt crisis.

Foreign-exchange trading is slightly bullish. The euro is posting small gains against the greenback, but the Canadian and Australian dollar are down. The biggest mover is the Japanese yen, which is falling dramatically on continued speculation that the Bank of Japan will ease monetary policy after the approval a new stimulus package last night.

Commodities are mixed, with oil little changed and copper higher by almost half a percent. Precious metals are flat and most agricultural foodstuffs are down.

In company-specific news, fast-food giant Yum Brands is indicated to open lower by about 9 percent after warning about slow growth in China. Telecom supplier Tellabs is up 17 percent after announcing a $1-share special dividend, while Zynga is falling almost 10 percent after Facebook made it harder for the company to draw gamers to its own site.

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