'Fiscal Cliff' Hopes Boost Wall Street

Category: Markets / Finance / Dec 17, 2012 5:10PM EDT
The S&P 500 ended at its highest level in almost two months on Monday (December 17) on rising hopes that negotiations over the "fiscal cliff" were making progress and that a deal could be reached in days. After weeks of deadlock, President Barack Obama and Republican House Speaker John Boehner met at the White House on Monday, raising hopes that Washington will be able to head off steep tax hikes and spending cuts that threaten the economy. Investors worry the U.S. economy could slide into recession if the tax and spending changes are implemented. Boehner has edged closer to Obama's position by proposing to extend lower tax rates for everyone who earns less than $1 million (USD). Still, his position remains far from that of President Obama. All of the S&P 500's 10 sectors were higher, led by financials and other growth-oriented sectors. In the financial sector, shares of Bank of America rose 4 percent to $11. American International Group Inc. shares rose 3 percent to $34.95 on plans to sell as much as $6.5 billion of AIA Group Ltd. Advancing stocks included those in the home construction sector, which rose 4.5 percent. The Dow Jones industrial average was up 100.38 points, or 0.76 percent, at 13,235.39. The Standard & Poor's 500 Index was up 16.78 points, or 1.19 percent, at 1,430.36, its highest close since Oct. 22. The Nasdaq Composite Index was up 39.27 points, or 1.32 percent, at 3,010.60.