Big banking deal propels stocks to a two-year high

Financial companies led stock indexes to new two-year highs Tuesday after another big banking deal raised hopes that more acquisitions could be on the way.

Toronto-Dominion Bank said it is buying Chrysler Financial, the automaker’s old lending arm, from Cerberus Capital Management LP for $6.3 billion. It was the latest example of a relatively healthy Canadian bank buying a U.S. lender battered by the financial crisis.

The Dow rose 55.03, or 0.5 percent, to close at 11,533.16. The S&P 500 index rose 7.52, or 0.6 percent, to close at 1,254.60. The Nasdaq composite rose 18.05, or 0.7 percent, to 2,667.61.

The S&P 500 closed above the level it reached Sept. 12, 2008, the last trading day before the collapse of Lehman Brothers at the height of the financial crisis. The Dow Jones industrial average is at its highest since Aug. 29, 2008.

Corporate mergers have picked up strongly this year. That, along with signs of an improving economy and a tax-cut package passed last week, have helped drive stocks up. The S&P 500 has jumped 6.3 percent this month and 12.5 percent this year.

 

Bank admits shelters were illegal, to pay $553 million

Deutsche Bank admitted criminal wrongdoing and agreed to pay more than $550 million for its participation in tax shelters that enabled the rich to temporarily avoid paying hundreds of millions of dollars in U.S. taxes, authorities said Tuesday.

Federal prosecutors and the Justice Department’s tax division announced the deal, saying a non-prosecution agreement requires the bank to continue cooperating and to submit to the appointment of an independent expert who will review its compliance measures and ensure it does not help people dodge taxes in the future.

Authorities said the $553,633,153 payment by the bank will include the amount of taxes and interest that the Internal Revenue Service was unable to collect from taxpayers from 1996 to 2002 because of the misconduct. It also includes a civil penalty of more than $149 million.

 

American Airlines stops selling tickets on Orbitz

American Airlines pulled its flights from the Orbitz travel website Tuesday in a dispute that could eventually affect the way travelers buy airplane tickets online.

The airline said its tickets sold previously on Orbitz are still valid. And American Airlines tickets can still be bought at the airline’s own website as well as other travel websites. American pulled its tickets from the Orbitz for Business site as well.

The dispute is the latest sign of strains between airlines and the companies that sell airline tickets, including online sellers like Orbitz.

Airlines have traditionally paid sellers a commission. American also pays fees to the global distribution companies that provide the flight information.

Now, American wants Orbitz to get that flight information directly from the airline, cutting out the global distribution systems.