Stocks Jump on Budget Optimism
NEW YORK (TheStreet) -- The major U.S. stock averages surged Wednesday on fresh hopes that the Democrats and Republicans will be able to work out a compromise during U.S. budget talks and avoid the fiscal cliff.
Both President Barack Obama and House Speaker John Boehner made positive statements about the progress being made on Capitol Hill.
The Dow Jones Industrial Average rose nearly 107 points, or 0.83%, to close at 12,985, after having been down by more than 100 points earlier in the session. The blue-chip index, which ended a two-day losing streak, is now up 6.3% so far in 2012.
Every sector finished higher, led by conglomerates, consumer cyclicals, and services.
Apple (AAPL) shares, however, fell 0.31%. The iPhone maker reportedly fired William Richardson, the tech giant's senior director of iOS services, over the failure of its new Maps app. Richardson was fired before Thanksgiving, the report said.
Volume totaled 3.34 billion on the New York Stock Exchange, and 1.73 billion on the Nasdaq. Advancers ran ahead of decliners by a 2.3-to-1 ratio on the Big Board and 1.4-to-1 on the tech-heavy index.
BNP Paribas economists said in a note that "we remain optimistic that a deal will be reached before year-end that will defer the bulk of the fiscal cliff."
However, the BNP economists added that the base effects and ongoing uncertainty over the fiscal cliff and the near-term impact of Hurricane Sandy are likely to leave investment growth negative in the fourth quarter.