Stocks Surge as Fiscal Cliff Deal Boosts Market
U.S. stocks rallied into the New Year after lawmakers reached a last-minute deal to avert the fiscal cliff, as investors cheered the extension of the Bush tax cuts for most Americans and the preservation of tax rates for those earning over $400,000. The Dow Jones Industrial Average surged over 260 points, or 2%, early Wednesday, with financial shares, tech stocks, and oil and gold prices also posting significant gains.
Key Takeaways:
- The Dow Jones Industrial Average rallied more than 260 points, or 2%, early Wednesday, with gains across all 30 stocks.
- Financial shares, including Bank of America, JPMorgan Chase, and Citigroup, rose between 2% and 4%, while tech stocks such as Apple and Hewlett-Packard logged big increases.
- Oil and gold prices also posted sharp gains, with the dollar mixed, gaining against the yen but weakening against the euro and British pound.
- The yield on the 10-year U.S. Treasury note rose to 1.84%, its highest level since mid-October, as investors shifted into riskier assets.
- Congress's deal allowed the payroll tax cut to expire but extended federal emergency unemployment insurance benefits for another year and preserved tax rates for those earning over $400,000.
- Major global markets, including European, Asian, and Australian markets, posted strong gains after news of the deal broke, with the Asian markets such as South Korea's KOSPI and Hong Kong's Hang Seng index advancing 1.7% and 1.9% respectively.
Statistics:
- Dow Jones Industrial Average: +260 points (2%) early Wednesday
- S&P 500: +2%
- Nasdaq: +2.5%
- Bank of America: +2%
- JPMorgan Chase: +3%
- Citigroup: +4%
- Apple: +4.5%
- Hewlett-Packard: +3.5%
- Oil prices: +2%
- Gold prices: +1.5%
- Yield on 10-year U.S. Treasury note: 1.84%
Sources:
- CNNMoney
- Dow Jones Industrial Average
- S&P 500
- Nasdaq
- Bank of America
- JPMorgan Chase
- Citigroup
- Apple
- Hewlett-Packard
- Institute for Supply Management
- Census Bureau