Wednesday Mid-Day Cheat Sheet: 3 Stories Driving Markets

The markets are flirting with ubiquitous gains on Wednesday afternoon. Strong tech earnings were supporting the Dow and Nasdaq, while the S&P just about broke even.

At 1:35 p.m.: DJIA: +0.51%, S&P 500: +0.07%, NASDAQ: +0.37%.

Here are three stories helping shape the markets:Congress

1) The House of Representatives has passed an extension of the U.S. debt limit. With no amendments, the bill will suspend the federal borrowing limit until May 19, with a provision adding that if Congress does not adopt a budget by April 15, their pay will be suspended for a year. The GOP is using this as an opportunity to negotiate for long-sought spending cuts ahead of the sequester, due in March… (Read more.)

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2) Global economic growth is expected to be a boon for American exports, according to an economist at the Peterson Institute for International Economics. Large, rapidly-industrializing economies such as India and China are expected to increase their demand for U.S. agriculture products, medical supplies, and high-end manufactured equipment.

Also on tap for growth through exports is the struggling coal industry and growing natural gas industry. Countries like China will need a tremendous amount of energy to fuel GDP growth rates up to 7.5 percent this year. Increases in energy demand in developed economies is often satisfied by higher efficiencies, limiting growth prospects.

3) Increased taxes are cutting into chain store sales, according to an economist at JPMorgan. A tax increase for most Americans, combined with the general effect of uncertainty in the economy, has helped pull sales down for each of the past three weeks. This follows an unexpected drop in consumer sentiment in December.

The payroll tax hike that was a part of the fiscal cliff tax agreement is expected to cost 160 million workers $700 a year. This amounts to $125 billion out of the hands of the market and into the hands of the government.

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