* Obama, Republicans edge closer in budget talks: source
* Baker Hughes shares fall after revenue outlook
* Wal-Mart unit bribed Mexican officials -media report
* Indexes up: Dow 0.1 pct, S&P 0.3 pct, Nasdaq 0.5 pct
By Ryan Vlastelica
NEW YORK, Dec 18 U.S. stocks rose modestly on
Tuesday as investors speculated negotiations between Democrats
and Republicans would lead to a deal to avert the "fiscal
The market's gains followed a steep rally in the previous
session, which lifted the S&P 500 to its highest in nearly two
Republican House Speaker John Boehner said he has hope for a
broader deal on the budget talks and was still talking with
President Barack Obama on the matter.
Obama made a counter-offer to Republicans on Monday night
that included a major change in position on tax hikes for the
wealthy, according to a source familiar with the talks.
The report followed a meeting between Obama and Republican
House Speaker John Boehner, who has edged closer to Obama's
position by proposing higher taxes on those who earn $1 million
or more and extending lower tax rates for everyone else.
"We've been getting a series of snippets suggesting
accommodation from both Boehner and Obama, which is feeding the
sense in markets that we could get a deal," said Michael
Holland, chairman of Holland & Co in New York.
Investors have been reluctant to make big bets in the face
of uncertainty over the fiscal cliff, a combination of steep tax
hikes and spending cuts that many fear could push the economy
into recession if they take effect next year.
"You can never discount the possibility that the government
will do something dumb and screw this up, but right now the
market is happy over the prospects for a deal," said Holland,
who oversees $4 billion in assets.
The Dow Jones industrial average was up 17.27 points,
or 0.13 percent, at 13,252.66. The Standard & Poor's 500 Index
was up 3.69 points, or 0.26 percent, at 1,434.05. The
Nasdaq Composite Index was up 15.28 points, or 0.51
percent, at 3,025.88.
Tech shares were among the strongest of the day, and gains
in large-cap technology shares lifted the Nasdaq. Seagate Tech
rose 3.4 percent to $29.01 while F5 Networks Inc
rose 2.4 percent to $94.84.
The New York Times said that Wal-Mart Stores Inc's
Mexican affiliate routinely used bribes to open stores in
desirable locations. The story cited 19 instances of the retail
giant paying off local officials. In a statement Monday night,
Wal-Mart spokesman David Tovar said the company was looking into
the allegations. Shares of Wal-Mart, a Dow component, fell 0.4
percent to $68.94.
Arbitron Inc surged 23 percent to $46.87 after
Nielsen Holdings NV agreed to buy the media and
marketing research firm in a deal worth $1.26 billion. Nielsen
rose 1.3 percent to $30.
Baker Hughes Inc said third-quarter margins and
revenue would be below its expectations because of lower land
drilling activity and price erosion. Shares rose 2.6 percent to
$41.73, reversing a decline in the premarket session.