MARKETS IN BRIEF: Tuesday was a lot like

MARKETS IN BRIEF: Tuesday was a lot like Monday on Wall Street – and investors hope stocks will break the pattern on Wednesday. Today’s close brought better results than Monday’s: the Dow ended -22.82 at 10,043.75 after climbing most of the afternoon and recovering from a 292-point drop in the initial hour of trading. The S&P 500 pulled out a minor gain to go +0.38% on the day to 1,074.03. The NASDAQ lost 2.60% to finish at 2,210.95.

CAUSE & EFFECT: The markets plunged in the morning thanks to renewed worries over European banking issues and news that North Korea’s army was on military alert and threatening action against South Korea. (That news proved inaccurate.) These two items affected the broad equities market. However, some outstanding gains emerged: Sprint Nextel, +10.4%; AutoZone, +5.6%; Radcom, +25.1%; Westwood One, +17.3%, and on the Dow, Home Depot at +2.3%. Among the big losers: Tower Semiconductor, -23.2%; Onstream Media, -19.5%; Fidelity Southern, -12.5%; Textron, -3.5%; Verisign, -2.9%.

WASHINGTON WATCH: If made law, the Bipartisan Tax Fairness & Simplification Act would kill the Alternative Minimum Tax, offer single filers a $15,000 standard deduction and joint filers a $30,000 standard deduction, and leave just three federal tax brackets (15%, 25%, 35%). It would remake all forms of IRAs into Retirement Savings Accounts and pair them with Lifetime Savings Accounts that in tandem could allow contributions of up to $7,000 per year ($14,000 for married couples). The Act would make the first 35% of qualified dividends and long-term gains tax-free, with anything over that taxed as regular income. Sen. Ron Wyden (D-OR) and Sen. Judd Gregg (R-NH) are the minds behind this attention-getting bill.

Sources: money.cnn.com/2010/05/25/markets/markets_newyork/ [5/25/10], cnbc.com/id/37333676 [5/25/10], cnbc.com/id/20360207 [5/25/10], money.cnn.com/2010/05/25/pf/taxes/tax_reform/ [5/25/10]

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