Treasury ending AIG bailout with a profit of $22.7 billion

WASHINGTON — The Treasury Department said Tuesday that it would raise $7.6 billion in the sale of its final shares of American International Group Inc., ending the controversial bailout of the insurance giant with a $22.7 billion profit.

The department agreed to sell its remaining 234 million shares in AIG, which represented 15.9 percent of the company, for $32.50 each. The sale in effect closes the books on a rescue that at its height had the government on the hook for more than $182 billion and owning 92 percent of the company. The offering is expected to be completed Friday.

Despite the bailout’s profit, critics note the huge toll it took on public confidence in the financial system and the precedent it helped set for government intervention to protect companies deemed too big to fail.

“The bailout was an enormous cost to this country,” said Phil Angelides, who headed the government’s Financial Crisis Inquiry Commission.

 

Amazon.com agrees to add sales tax for Massachusetts

BOSTON — Massachusetts retailers are hailing a deal reached between online seller Amazon.com and state officials to begin collecting the state’s 6.25 percent sales tax from Bay State residents who order items through the website.

Gov. Deval Patrick announced the agreement Tuesday, a deal long sought by owners of traditional “brick and mortar” stores in Massachusetts who say online tax-free purchases put them at a critical disadvantage since they are required to collect the tax on their products. They say the arrangement has amounted to an automatic 6.25 percent discount for online merchants that they can’t match.

Under the agreement, Amazon will start collecting the Massachusetts sales taxes on Nov. 1, 2013.

The governor said the state and Amazon will work together to push for federal legislation that would “resolve the sales tax issue by creating an equitable and simple framework for collecting sales taxes” from all Internet sellers.

Amazon now collects sales taxes on orders shipped to a number of states, including New York, California and Texas, and has agreed to start imposing levies in other states.

 

Stocks gain for a fifth day amid budget talks optimism

NEW YORK — Stocks rose for a fifth straight day Tuesday as investors latched on to reports of progress in budget talks in Washington. The Standard & Poor’s 500 index had its biggest gain this month.

The Dow Jones industrial average gained 78.56 points to 13,248.44. It was up as much as 137 points earlier in the day. The S&P 500 finished up 9.29 points at 1,427.84. The Nasdaq composite ended up 35.34 points at 3,022.30.

Delta Air Lines rose 52 cents, or 5.1 percent, to $10.66 after it said it will buy almost half of Richard Branson’s Virgin Atlantic for $360 million as it seeks a bigger share of the New York-to-London travel market.

AIG gained $1.90 to $35.26 after the U.S. Treasury Department said it has sold the rest of its stake in the insurer. AIG was bailed out by the government after nearly collapsing during the 2008 financial crisis.

The S&P and Nasdaq got a boost from Apple, which advanced $11.57, or 2.2 percent, to $541.39, its biggest advance in more than a week.