Wall St up despite fiscal cliff worries

2012-11-29 07:45

NEW YORK November 28

US stocks scored solid gains Wednesday, spurred by encouraging remarks by politicians on averting looming tax hikes and spending cuts that could harm the economy.

The Dow Jones Industrial Average climbed 106.98 points (0.83 percent) to 12,985.11, snapping two days of losses.

The S&P 500-stock index gained 10.99 (0.79 percent) at 1,409.93, while the Nasdaq Composite added 23.99 (0.81 percent) at 2,991.78.

Stocks initially opened lower and continued to slide after weaker-than-expected housing data before rebounding sharply over the course of the day.

Investors digested reassuring comments by both the Democratic president and a top Republican lawmaker.

"Fiscal-cliff chatter fueled the market's roller-coaster session, with optimistic comments from both President Barack Obama and House Speaker John Boehner placating the Street," said Andrea Kramer of Schaeffer's Investment Research.

The positive finish also followed the Federal Reserve's Beige Book report showing that US businesses are increasingly concerned about the fiscal cliff impasse.

Hewlett-Packard led the Dow higher, gaining almost 3 percent despite a Moody's credit downgrade.

Dow member Chevron added 2.1 percent, American Express gained almost 2 percent, Pfizer was up 1.7 percent and Wal-Mart rose 1.5 percent.

Discount retailer Costco surged 6.3 percent after announcing a jump in same-store sales in November and plans to issue a special $7 cash dividend per share on December 18, joining a rash of companies aiming to avoid higher dividend taxes expected to come from US deficit-slashing negotiations.

Struggling Knight Capital soared 15.2 percent after high-frequency trader Getco offered to buy it for $539 million.

On the Nasdaq, heavyweight Apple lost 0.3 percent. Groupon jumped 11.6 percent.

Bond prices climbed. The 10-year US Treasury yield fell to 1.62 percent from 1.65 percent late Tuesday, and the 30-year dropped to 2.78 percent from 2.79 percent.

Bond prices and yields move inversely.