Wall Street bounces back on hope for "cliff' solution

NEW YORK Fri Dec 21, 2012 5:14am IST

1 of 2. Traders work on the floor of the New York Stock Exchange at the opening of the trading session in New York October 5, 2012.

Credit: Reuters/Mike Segar

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 .DJI gained 59.75 points, or 0.45 percent, to 13,311.72 at the close. The S&P 500 .SPX rose 7.88 points, or 0.55 percent, to 1,443.69. The Nasdaq Composite .IXIC 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 .GSPF 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 .HGX 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)

Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

Sino-Indian Ties

REUTERS SHOWCASE

Eyeing Stocks

Eyeing Stocks

Interview - EPFO chief urges green light to buy stocks  Full Article 

Stimulus Reports

Stimulus Reports

China cenbank injects $81 bln into major banks to support economy - reports  Full Article 

Ranbaxy Investigation

Ranbaxy Investigation

Ranbaxy says U.S. authorities seek information on pricing data.  Full Article 

Monsoon Update

Monsoon Update

Delayed retreat of monsoon rains to start this weekend  Full Article 

Financing Deal

Financing Deal

IndiGo agrees $2.6 billion aircraft finance deal with China's ICBC  Full Article 

Fed Policy Meeting

Fed Policy Meeting

Fed could hint on rate-hike plans as it prepares for policy turn  Full Article 

Grim Outlook

Grim Outlook

Sony deepens loss estimate on struggling smartphone business  Full Article 

Sugar Surplus

Sugar Surplus

India to produce surplus sugar for fifth straight year - industry body  Full Article 

Business Sentiment

Business Sentiment

China, Singapore slowdown weigh on Q3 Asia business sentiment   Full Article 

Reuters India Mobile

Reuters India Mobile

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