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Stocks up on signs of fiscal progress

David Russell (david.russell@optionmonster.com)

Stock futures are inching higher this morning as signs emerge that fiscal calamity will be averted in Washington.

The S&P 500 is indicated to open higher by about one-third of 1 percent despite weakness in Europe. The gains come amid reports that Speaker of the House John Boehner is willing to accept higher tax rates on Americans earning more than $1 million a year. While nothing further has come of the news yet, it could help facilitate a deal to avoid painful tax hikes and spending cuts at year-end.

Most of the sentiment overseas is modestly bearish. European stocks are down by about one-third to half a percentage point. The big news in the overnight session came from Japan, where the Liberal Democratic Party regained power in a landslide election. Investors expect the new government to aggressively promote exports and stimulate the economy. That drove the Nikkei higher by almost a full percentage point. The Japanese yen, however, climbed as traders covered short bets against the currency.

Because it's often used as a safe-haven currency, that strength in the yen is swaying sentiment in the foreign-exchange and commodity markets. The euro is modestly lower, as are oil and silver. Copper fell by three-quarters of a percentage point, while agricultural foodstuffs are mixed to positive.

The S&P 500 is also attempting to hold support today around the potentially important technical level of 1410, which was resistance in March and April, then support in early October. It's also the location of the 50- and 100-day moving averages now, so a bounce from here could draw more buyers of stocks.

In company-specific news, Energy Transfer Partners could be active after agreeing to sell two subsidiaries to Laclede Group for $1 billion. Apple is also trying to stay above $500 after getting downgraded to "neutral" by Citigroup.

Lexicon Pharmaceuticals is higher after regulators gave fast-track status to its LX1033 intestinal drug. Clearwire is down about 9 percent after Sprint Nextel said it would pay $2.97 a share for the broadband company, disappointing investors who had bid it over $3.

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