Fin24

US stocks gain amid fiscal cliff hopes

2012-12-21 07:36

New York - US stocks swung higher on Thursday as the market appeared to show optimism about a deal in Washington to prevent the economy from going over the "fiscal cliff."

The Dow Jones Industrial Average finished the session up 59.75 points at 13,311.72.

The broad-market S&P 500 gained 7.88 points at 1,443.69, while the tech-rich Nasdaq Composite climbed 6.03 points at 3,050.39.

With an end-of-the-year deadline looming, Washington continues to wrangle about the so-called fiscal cliff, a mix of tax hikes and spending cuts that, in the absence of a political compromise, could take the world's biggest into recession.

Still, traders appeared to see prospects for deal.

"The sentiment is that if both side have given a little already, there is still room in the middle to meet and there is time to do it before the end of the year," said analyst Art Hogan of Lazard Capital Markets.

"This market has a sense we will get something accomplished out of Washington and that is why we had this end of the day rally."

Investors also seemed bolstered by a series of positive economic data, including an upward revision to 3.1% of gross domestic product growth in third quarter and a spike in sales of existing homes to a three-year high.

Stocks in focus included NYSE Euronext, which soared 34.1% on word that InterContinentalExchange (ICE) would buy it for $8.2bn in a deal that would create the world's biggest market operator. ICE was up 1.4%.

Oracle dipped 0.44% after announcing it would buy Eloqua, a cloud software firm. The deal is expected to close in the first half of 2013. Eloqua rose 32%.

Google edged 0.31% higher. Late on Wednesday, the tech giant announced it was selling the Motorola Mobility Home unit to global communications technology company ARRIS in a cash and stock deal valued at $2.35bn. ARRIS was up 3.6%.

Bond prices held steady. The 10-year US Treasury yield stayed at 1.80, while the 30-year remained largely unchanged at 2.98.

Bond prices and yields move inversely.