Dow, S&P 500 Strengthen After Obama Speaks; Nasdaq Dips on Apple
NEW YORK ( TheStreet) -- The Dow Jones Industrial Average and S&P 500 rose today, rebounding after President Barack Obama spoke to top business leaders and made a YouTube push to pass his budget proposal. A big drop in Apple (AAPL) shares dragged down the Nasdaq.
China's new leadership spoke of supportive measures for the Chinese economy, helping stocks worldwide. Earlier in the day, all three indices were trading in the red.
Obama addressed the Business Roundtable, a group of CEOs, about White House budget plans. He indicated to Republicans that he would refuse to let the tax-and-spending fight in the "fiscal cliff" talks to block raising the debt ceiling in early 2013. "I will not play that game," he said.
Prior to Obama's speech, Stephen Guilfoyle, U.S. economist at Meridian Equity Partners, had said that "when this president speaks, traders tend to sell while he's speaking. The market swoons, and when he's done, the market buys back their shares."
The Dow Jones Industrial Average closed up 83 points, or 0.64%, to 13,034. The blue-chip index, which has risen in four of the past six days, began the session up more than 6% in 2012.
Travelers shares jumped 4.9% after the provider of property-casualty insurance said it intends to resume repurchases of its common shares. The company also said its preliminary estimate of net losses relating to Storm Sandy is about $650 million.
The S&P 500 added 2 points, or 0.16%, to 1,409. The Nasdaq was off by 23 points, or 0.77%, at 2,974, as Apple shares tumbled 6.4% on reports of a margin hike at one clearing firm and concerns over component supplies falling next year.
The strongest sectors in the broad market were financials, energy, transportation and conglomerates. The weaker sectors were consumer-cyclicals and technology.
Volumes totaled 4.15 billion shares on the New York Stock Exchange and 1.79 billion shares on the Nasdaq. Advancers edged past decliners by a ratio to 1.1-to-1 on the Big Board. Losers beat winners by a 1.3-to-1 ratio on the Nasdaq.
"The fiscal cliff is serious, but it is merely a symptom of a greater underlying economic quagmire," said Jeffrey Sica, manager of SICA Wealth Management. "The economy has failed to achieve sustainable growth to support this year's stock appreciation. The uncertainty created by this quagmire will create anxious investors, and anxious investors eventually become sellers."
Before the market open, Automatic Data Processing's employment report showed an addition of 118,000 jobs in the U.S. in November, less than a downwardly revised 157,000 in October as Hurricane Sandy "wreaked havoc" on the job market, slicing an estimated 86,000 jobs from payrolls, the report said.