DAVID K. RANDALLNEW YORK (AP) â¿¿ Stocks ended flat Monday after expectations that a tax-cut package will pass the Senate kept them higher for much of the day. The tax-cut compromise brokered by the White House and Republicans was scheduled for its first Senate vote late Monday. If enacted, the package will extend tax cuts passed during the Bush administration for all income levels for another two years. It will also extend unemployment benefits through next year and put in place a one-year reduction in Social Security taxes. Economists expect the nearly $900 billion tax package to boost economic growth and increase the size of the budget deficit. House Democrats have pledged to block the measure unless tax rates rise for the nation's wealthiest estates. Traders were also encouraged by a handful of deals announced Monday. General Electric Co. is paying $1.3 billion to buy British oilfield company Wellstream Holdings PLC and Dell Inc. is spending $960 million for network storage company Compellent Technologies Inc. The S&P 500 index eked out a new 2010 high for the fourth time in four days. The index rose 0.06 point to 1,240.46. Other indexes took a late afternoon spill. The Dow Jones industrial average closed with a gain of 18.24, or 0.16 percent, to 11,428.56, having been up as many as 70 points earlier. The Dow is now just 15.52 points from its 2010 closing high, reached Nov. 5. The Nasdaq composite index fell 12.63, or 0.5 percent, to close at 2,624.91. That snapped a six-day streak in which the index notched new 2010 highs. Falling shares and rising ones were almost evenly matched on the New York Stock Exchange. Consolidated volume was 4.4 billion shares. The tax plan has crushed the prices of Treasury bonds since it was announced last week. The yield of 10-year Treasurys rose to 3.36 percent early Monday before falling to 3.28. Treasurys reversed course after the Federal Reserve bought $7.8 billion in government bonds coming due between 2016 and 2017. Treasury yields have been mainly rising over the past month.
"It looks like the big trade going on right now is that money is working its way out of bonds and into stocks," said Ryan Detrick, a senior strategist at Schaeffer's Investment Research. "We think that is only going to continue as the economy starts looking better."World stock markets rose. China's benchmark Shanghai Composite Index gained 2.8 percent after Chinese authorities surprised investors by not raising interest rates. Investors had anticipated an interest rate hike to combat high inflation. Blue chip stocks in Europe rose 0.2 percent. The dollar fell 0.9 percent against an index of six currencies. In corporate news, Hewlett-Packard Co. fell 2.1 percent to $41.65 after Goldman Sachs gave the hardware company a sell rating. Goldman's analysts see tablet computers, such as Apple Inc.'s iPad, taking business away from PCs. Shares in Dionex Corp. shot up 20 percent to $117.83, after Thermo Fisher Scientific Inc. said Monday it planned to buy the maker of laboratory equipment for $2.1 billion. Thermo Fisher said it will pay $118.50 a share. Shares in Thermo Fisher rose 4.7 percent to $55.56.