Wall Street jumps in another "fiscal cliff" swing
By Rodrigo Campos | November 29, 2012 8:35 AM EST
Stocks rallied on Wednesday after comments from House Speaker John Boehner, the top Republican in Congress, on a possible compromise to avoid the "fiscal cliff" turned the market around.
The S&P 500 rebounded from a 1 percent decline, gaining more than 20 points from its low after Boehner, an Ohio Republican, said he was optimistic that a budget deal to avoid big spending cuts and tax hikes can be worked out. President Barack Obama added to the good feelings, saying he hoped to get a deal done in the next four weeks.
Whether or not those remarks reflect the reality of negotiations is another story.
"The fiscal cliff is dominating the discussion, and short term, we're a little bit too optimistic on it being fixed right away," said John Manley, chief equity strategist for Wells Fargo Advantage Funds in New York.
In expectation of higher dividend tax rates in 2013, companies have been shifting dividends or announcing special payouts to shareholders.
Costco Wholesale Corp
The market's move marked the second straight day where a leading legislator dictated trading action. On Tuesday, stocks fell on pessimistic remarks from Senate Majority Leader Harry Reid, a Democrat from Nevada.
The market has been swinging for weeks now on headlines from Washington, with Wednesday's gyrations once again highlighting the importance that Wall Street is giving to finding a solution to avoid the series of tax increases and spending cuts that could push the U.S. economy into recession.
The Dow Jones industrial average <.DJI> rose 106.98 points, or 0.83 percent, to 12,985.11 at the close. The S&P 500 <.SPX> gained 10.99 points, or 0.79 percent, to 1,409.93. The Nasdaq Composite <.IXIC> added 23.99 points, or 0.81 percent, to close at 2,991.78.
The S&P 500 bounced off a strong support area near 1,385 that includes both its 200- and 14-day moving averages. It closed above 1,400 for the third session in four - an optimistic sign for stock bulls.
Knight Capital Group Inc
Apparel retailer Express Inc
The S&P retail index <.SPXRT> gained 1.4 percent.
Green Mountain Coffee Roasters
On the NYSE, roughly seven stocks rose for every three that fell, and on Nasdaq, five issues rose for every three that fell.
(Reporting by Rodrigo Campos; Editing by Jan Paschal)
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