Wall Street bounces back on hope for 'cliff' solution

NEW YORK Fri Dec 21, 2012 3:25am IST

Traders work the floor at the New York Stock Exchange in New York December 20, 2012. REUTERS/Andrew Kelly

Traders work the floor at the New York Stock Exchange in New York December 20, 2012.

Credit: Reuters/Andrew Kelly

Related Topics

Stocks

   

NEW YORK (Reuters) - U.S stocks rebounded from early losses on Thursday after Republican House Speaker John Boehner said he would keep working on a solution to the "fiscal cliff" while also slamming President Barack Obama's approach to budget talks.

NYSE Euronext NYX.N was the S&P 500's biggest gainer, surging 34 percent to $32.25 after IntercontinentalExchange Inc (ICE.N) said it would buy the operator of the New York Stock Exchange for $8.2 billion.

ICE shares shot up 1.4 percent to $130.10.

Republicans in the U.S House of Representatives pushed ahead with their own plan to avoid a series of steep tax hikes and spending cuts due in early 2013, complicating negotiations with the White House. Obama has vowed to veto the plan.

Investors have hoped for an agreement soon between policymakers, but progress has been slow. Boehner said he expected to continue to work with Obama, but repeated his charge that the president and Senate Democrats were trying to "slow walk" the country over the fiscal cliff.

"Speaker Boehner went on the air and basically told us he doesn't like what the president's doing or not doing, and the markets rallied on that, which was kind of weird," said Stephen Guilfoyle, a trader at Meridian Equity Partners, in New York.

The Dow Jones industrial average gained 59.75 points, or 0.45 percent, to 13,311.72 at the close. The S&P 500 rose 7.88 points, or 0.55 percent, to 1,443.69. The Nasdaq Composite climbed 6.02 points, or 0.20 percent, to 3,050.39.

Stocks rallied earlier in the week on signs of progress in the fiscal cliff negotiations. But with the S&P 500 up 14.8 percent so far this year, investors are taking the opportunity to engage in some hedging as 2012 comes to a close.

Herbalife (HLF.N) lost 9.6 percent to $33.74 following news that hedge fund manager Bill Ackman was betting against the company as part of his big end-of-the-year short.

The S&P Financial Index gained 1.4 percent.

The U.S. economy grew 3.1 percent in the third quarter, faster than previously estimated, while the number of Americans filing new claims for jobless benefits rose more than expected in the latest week.

Existing home sales jumped 5.9 percent in November, more than expected, and by the fastest monthly pace in three years. An index of housing shares gained 0.78 percent.

But KB Home (KBH.N) slid 6.4 percent to $15.60 as the company reported higher homebuilding costs and expenses in the fourth quarter.

About 6.4 billion shares changed hands on the New York Stock Exchange, the Nasdaq and NYSE MKT, roughly in line with the daily average so far this year of about 6.46 billion shares.

On the NYSE, advancers outnumbered decliners by a ratio of about 2 to 1. On the Nasdaq, five stocks rose for every three that fell.

(Additional reporting by Ryan Vlastelica and Leah Schnurr; Editing by Jan Paschal)

FILED UNDER:

REUTERS SHOWCASE

WTO Trade Deal

WTO Trade Deal

WTO clinches first global trade deal in its history  Full Article 

Kashmir Attack

Kashmir Attack

Ten dead in Kashmir's worst militant attack in more than a year  Read 

OPEC Meeting

OPEC Meeting

Saudis block OPEC output cut, oil price sinks further.  Full Article 

E-Commerce Boom

E-Commerce Boom

Online grocers come up trumps in India's e-commerce boom   Full Article 

GDP, RBI Preview

GDP, RBI Preview

GDP growth set to weaken, business wants reforms more than rate cut  Full Article | Related Story 

Jaitley to Rajan

Jaitley to Rajan

Jaitley likely to meet Rajan on Monday to urge rate cut  Full Article 

Banking Sector

Banking Sector

India moves to allow more businesses to offer basic financial services.  Full Article 

Jamini Roy

Jamini Roy

Photo Gallery – Bengali household name Jamini Roy’s paintings  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device  Full Coverage