Stocks gain on optimism that budget deal is near
12/18/2012NEW YORK — Stocks edged higher on Wall Street today amid optimism that lawmakers are closing in on a budget deal that will stop the United States from going over the “fiscal cliff” at the beginning of next year.
The Dow Jones industrial average rose 115 points to 13,350 as of 1 p.m. The Standard & Poor's 500 gained 15 points to 1,445. The Nasdaq composite rose 42 points to 3,052.
House Speaker John Boehner told reporters he remains hopeful that a fiscal cliff compromise can be reached, but says President Obama has yet to offer a balanced deficit-cutting plan. Mr. Boehner said Mr. Obama's latest offer for $1.3 trillion in tax increases over the next decade with $850 billion in spending cuts is not balanced enough.
“People are cheering the prospect for some compromise in Washington right now,” said Joe Costigan, director of equity research at Bryn Mawr Trust Co. “At the moment there is some pretty good news and the market is reacting favorably to it, but the deal isn't done yet.”
Stocks slumped after the presidential election Nov. 6 on concern that a divided government would struggle to reach an agreement before Jan. 1, when a series of series of tax increases and government spending cuts are scheduled to take effect if no deal is reached. Those measures could push the U.S. back into recession. The S&P has since recouped all of those losses.
The Dow Jones is up 2.3 percent in December and is on track to close higher for a fourth straight year. The index has advanced 9 percent in 2012. The S&P500 is also up for the year, gaining nearly 15 percent.
Allstate Corp. gained 77 cents to $41.92 after the company's board of directors approved a plan to buy back up to $1 billion of the insurer's shares by the end of the year.
Eli Lilly also advanced after saying it would buy back its own stock. The drugmaker rose 79 cents to $49.13 after saying that its board had approved a $1.15 billion share buyback.
The yield on the 10-year Treasury note climbed 4 basis points to 1.81 percent. The yield has climbed 20 basis points since the start of the month.
Among stocks making big moves today;
— Arbitron, a provider of radio ratings, surged $9.01 to $47.05 after TV ratings company Nielsen said it would buy it for about $1.26 billion.
— FactSet Research Systems Inc., a provider of financial information to investors, fell $3 to $93.39 after it reported earnings and revenues fell short of analysts’ estimates.