Market Minute: U.S. Companies Park Profits Overseas, Avoid Taxes

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Produced by Drew Trachtenberg

The Dow jumped more than 300 points last week. That's 2.2 percent, as the blue chip index set record highs four days in a row. The S&P 500 also rose 2.2 percent and the Nasdaq gained 2.4 percent.

The S&P is now just 15 points away from its all-time high, and many market pros think that would be more significant than the Dow's recent records. But the Nasdaq is still a long way from its record, set 13 years ago yesterday: It's 36 percent below where it was before the dot-com bubble popped in March of 2000.

Large American companies are parking more of their profits overseas. A Wall Street Journal analysis found that 60 big companies shielded more than 40 percent of their annual profit from U.S. taxes. The five with the biggest offshore holdings are General Electric (GE), Microsoft (MSFT), and three pharmaceutical giants – Pfizer (PFE), Merck (MRK) and Johnson & Johnson (JNJ).

A much smaller drug firm, the Medicines Company (MDCO), could rally after reporting its experimental drug for use during angioplasty procedures, significantly outperformed Plavix – the multi-billion dollar leader from Bristol-Myers and Sanofi.

A setback for medical device-maker Boston Scientific (BSX): It reports mixed results for a stroke prevention device designed to help patients with irregular heartbeats.

After years of delay, the new Blackberry Z-10 from Research in Motion could be available by the end of this week. Business customers can start ordering it today from T-Mobile. And it could be on store shelves for retail customers next week.

The Deepwater Horizon disaster in 2010 has already cost BP (BP) more than 24-billion dollars... and the company now says future payments to people and businesses that suffered losses will be greater than previously thought. In its annual report, the company says it can no longer give a reliable estimate of costs associated with a settlement agreed to last year.

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Betty

The IQ of the voters here in the US have dropped off the chart. They vote on an "American Idol" mentality, so that is the reason we are all in deep doo doo in this country. God help us!!

March 11 2013 at 12:37 PM Report abuse -1 rate up rate down Reply
blondie

Maybe we should give these Liberals an IQ test before they can vote to elect another President. If that had been the case Obama would not have got elected the first time. Wonder just how much money GE gave to Obama's campaign

March 11 2013 at 12:30 PM Report abuse -1 rate up rate down Reply
blondie

To the LIBERALS This is why we don't need higher taxes to drive more money out of this country. We should not support any companies that take their money out of this country

March 11 2013 at 12:26 PM Report abuse -1 rate up rate down Reply
kazkoda

Funny, during the campaign the Democrats kept hopping on Romney's off shore accounts etc., but lo and behold the top 5 are all Obama contributors is this what you liberals call payback or bribery?

March 11 2013 at 12:26 PM Report abuse -1 rate up rate down Reply
rreef1993

Look who leads the pack Emwalt of G.E. (Obama's favorite guy. Really can not blame them they are just looking out for us (the shareholders) with this administrations attitude toward private business and the largest business tax rate in the world. Come on Washington wake up and give private business a good reason to invest in America.

March 11 2013 at 11:49 AM Report abuse +2 rate up rate down Reply
dkelmstra

FOREIGN PROFITS are only taxed in USA when brought back to USA. It doesnt make sense to bring them back to the USA and pay taxes on them when you are planning to reinvest them in more foreign expansion. I have worked for several global companies and the currency exchange rates alone would kill us so we kept profits at country of origin -- where by the way we had to pay taxes on them in country of origin.
US corp taxes are now highest in the world -- why would any corp want to bring profits back here and pay that high tax rate? The profits are from foreign operations NOT USA operations.

March 11 2013 at 10:36 AM Report abuse rate up rate down Reply
pbgardenpet

They should, corporate taxes are to high here.

March 11 2013 at 10:21 AM Report abuse rate up rate down Reply
pfp291

Yes, that is Jeff Immelt; the big obama supporter and cheerleader who has BIG access to the White House. HMMMMMM.

March 11 2013 at 10:15 AM Report abuse rate up rate down Reply
lacabrera

That is Obama's friend in the White House ,His Job council from GE !

March 11 2013 at 9:46 AM Report abuse rate up rate down Reply
1 reply to lacabrera's comment
m2modon

Yep that's Obama's buddy. And if you look into this further, you'll find that Microsoft and many of the other companies that were outed, gave millions to Obama's campaign.
Don't you just love Obama's transparency?

March 11 2013 at 10:01 AM Report abuse rate up rate down Reply