Obama Defends Budget Plan
President Barack Obama defended his 2012 budget Tuesday after intense criticism from Republicans. The president said difficult decisions about the future of Medicare, Medicaid and Social Security can only be made with the White House and both parties in Congress working together.
As the debate heats up over next year's budget, Congress has yet to finish funding the current year. Republicans want to cut more than $60 billion in federal spending. Political leaders worry that a lingering fight could shut down the government when the current funding ends on March 4.
Quinn Delivers State of the City Speech
City Council Speaker Christine Quinn delivered her State of the City address Tuesday. She put forward an agenda that ranged from balancing the city's budget to helping New Yorkers find parking spots.
"Yes we will take on the big challenges, like reforming our city’s budget," she said. "But those challenges cannot — and will not — distract us from our responsibility of making New Yorkers lives a little easier today and a lot more secure tomorrow."
Retail Sales Rise in January
Retail sales rose in January, for the seventh consecutive month. The increase came even as bad weather in much of the U.S. limited spending, at least in stores.
"Online buying had a pretty good increase in month of January, even though it had been strong in December, so no back-off there," said Stuart Hoffman, chief economist for PNC Financial Services Group.
While people are buying discretionary items like electronics, Americans are also paying more for essentials, like food and clothing and gas. Nationwide, a gallon of gasoline now averages $3.19.
A Major Stock Merger
The New York Stock Exchange, that icon of America's financial system, will have a new owner. Deutsche Boerse, the German exchange based in Frankfurt, will take over a company that is synonymous with Wall Street, to create the world's largest financial markets company — more than $20 trillion in annual trading. The boards of both exchange owners have signed off on the deal, but it must still be approved by shareholders and regulators.
Mayor Michael Bloomberg said that new company, with a co-headquarters office in Manhattan, "reaffirms the central position that New York continues to play in the international financial system."
New York Senator Charles Schumer also supports the deal, whereby the German exchange will control 60 percent of the new company. But on CNBC today, he expressed one concern. He wants "New York" to come first in the name of the new company. "There are lots of good things with this deal for New York, for the markets, and for our country," he said. "But the name is important and will be indicative of where it goes, so I'm withholding judgment."
On Wall Street, Louise Howard works for a nonprofit that focus on the financial industry. She said the deal represents what the stock exchange is all about. "This is capitalism, American capitalism at its finest," she said. "I love it."
Financial analyst Paul Sagawa thinks the merger will have little effect on trading in New York because technology makes where stocks are physically traded obsolete. "There's some nostalgia element to all of this. The floor's still sort of an interesting place to watch, you know, the trades be made around the posts," he said. "But it really is, you know, a relic a bit."
Not everyone was thrilled by the deal. Colin Barr covers finance for Fortune.com. He talks about why a more global exchange isn't necessarily better.
Finally, with all this stock market news, the Dow closed down 42 points, at 12,227. The S&P 500 lost four points, ending at 1,328. The Nasdaq lost 13 points, closing at 2,804.