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US stocks rise on fiscal cliff hopes

Dec 18 2012 07:37 AFP


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New York - US stocks rose on Monday amid Wall Street hopes of a political compromise that would prevent the economy from going over the "fiscal cliff" in two weeks.

The Dow Jones Industrial Average finished the session up 100.38 points at 13,235.39.

The broad-market S&P 500 gained 16.78 points at 1,430.36, while the tech-rich Nasdaq Composite was up 39.27 points to 3,010.60.

President Barack Obama hosted top Republican lawmaker John Boehner in the White House Monday in what appeared to be the latest effort to avert going over the so-called fiscal cliff, a mix of steep tax hikes and spending cuts set to take effect in January if Washington fails to reach a deal.

Economists say going over the "cliff" could drag the world's biggest economy back into recession.

"News of steps toward a compromise regarding tax revenues between Republicans and Democrats proved to be the catalyst for the Street," said analysts with Charles Schwab & Co.

Apple gained 1.8%. The tech giant announced Sunday that it had sold more than two million of the new iPhone 5 in China during the smartphone's first weekend in stores there.

Still, Canaccord Genuity slightly lowered its price target for Apple shares, citing softer sales expectations internationally.

American International Group (AIG) rose just shy of 3%. The insurance giant, bailed out by Washington during the financial crisis, said it would sell its remaining stake in Asian insurer AIA, in a deal that could raise up to $6.5bn.

Sprint Nextel inched up 0.2% after announcing that it would boost its offer for shares in Clearwire to $2.97 per share from $2.90. Clearwire lost 13.7%.

General Electric was up 1.4%. The Wall Street Journal reported Monday that the industrial giant is on the verge of a deal to buy Italian aerospace group Avio SpA for as much as three billion euros, or nearly $4bn.

Google meanwhile climbed 2.7% amid news reports that US regulators are likely to conclude a lengthy antitrust probe of its dominance of Internet searches with a voluntary settlement.

Monday's bond prices fell. The 10-year US Treasury yield rose to 1.76% from 1.71% late on Friday, while the 30-year increased to 2.93% from 2.87%.

Bond prices and yields move inversely.

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wall street  |  markets  |  us fiscal cliff
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