Passage of a congressional measure to avert the fiscal cliff gave a big boost to the U.S. stock market today (Wednesday), the first trading day of 2013.
Right out of the gate, all three major indexes jumped. Just before 2 p.m., the Dow Jones Industrial Average had climbed 232 points. The Standard & Poor's 500 Index jumped 25 points, and the Nasdaq rose 70 as markets cheered the news.
"We are happy that we are halfway home to fixing the fiscal cliff; we figured out the revenue side and delayed the spending side," Art Hogan, market strategist at Lazard Capital Markets LLC, told MarketWatch.
The rally followed a late surge Monday, New Year's Eve, when word emerged from Capitol Hill that progress had been made in the fiscal cliff talks, sending the Dow up 166 points by the session's close.
For 2012, the Dow added 7.3%, ending at 13,104.14. The S&P gained 13.4% to finish the year at 1,426.19, and the tech heavy Nasdaq added 15.9% to end 2012 at 3,019.51.
The rally in the stock market today came as investors breathed a sigh of relief that at least a partial deal had been reached.
"What's been hanging over the markets for the last couple of months has finally been released. The rally today (Wednesday) is 100% about the end of the fiscal cliff, and people are buying with both hands," Sean Kelly, a managing director at Knight Capital Group, told CNN Money.
But many analysts cautioned that gains in the stock market today were nothing more than a rally based on relief over the fiscal cliff deal and said the gains may be short-lived.
Stock Market Today: First 2013 Acquisition Deal
The all-cash deal drives Avis Budget Group to the No.1 position in the explosive U.S. car-sharing market. The $12.55 per ZIP share is a whopping 49% premium to its Monday close.
Shares of ZIP soared more than 48% following the news. In a nod that Avis shareholders liked the deal, shares of CAR revved up better than 5% to $20.81.
Also in the stock market today, shares of Apple Inc. (Nasdaq: AAPL) rose $12.66 midday to $544. 75. Shares of the iPhone, iPad and iPod maker have been under pressure recently as price targets and earnings estimates were slashed at several Wall Street firms due to early lackluster iPhone5 sales. But the decline has led others to pile in as the fresh bite out of Apple shares makes the stock more affordable than its 52-week high of $705.
Financials, the best sector of 2012, marched higher again Wednesday. Bank of America Corp. (NYSE: BAC), up 104% last year, added another 3% Wednesday afternoon and was last changing hands at $11.98 after hitting a new intraday high of $12.15.
Shares of U.S. Steel Corp. (NYSE: X) added 7.63% after Credit Suisse upgraded the stock to an "Outperform."
Dole Food Co. Inc. (NYSE: DOLE) shares slumped 12.38% after the company issued downbeat earnings guidance.
In commodities, crude oil, which lost 7.09% in 2012 to end at $91.82, gained $1.43 to $93.25.
Gold logged its 12th consecutive annual gain in 2012, finishing up 6.96% at $1,674.80 after reaching as high as $1,794.10 and trading as low at $1,536.20 during the year. Wednesday afternoon, the yellow metal greeted the New Year with a $13.80 gain at $1,689.
Silver, which enjoyed stellar gains in 2011 but just ho-hum returns in 2012, was higher by 84 cents at $31.08.
Related Articles and News:
- Money Morning:
Fiscal Cliff Deal Averts the Crisis…But Now What
- Money Morning:
The Fiscal Cliff's Biggest Surprise Could Be a Rising U.S. Dollar
- Money Morning:
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