Wall Street Rallies After Optimism Over "Fiscal Cliff" Talks

Category: Markets / Finance / Nov 19, 2012 6:08PM EDT
U.S. stocks bounced higher for a second consecutive session on Monday (November 19) as investors were encouraged by the early atmosphere surrounding talks to tackle the nation's fiscal crunch. Stronger-than-expected earnings from Lowe's and Tyson Foods, as well as encouraging housing data, also contributed to the market's advance. Tyson and Lowe's were the top two percentage gainers on the S&P 500. The S&P 500 is up more than 2 percent in the last two sessions as rhetoric from legislators over the weekend suggests a deal could be reached to stave off the looming "fiscal cliff," a series of tax and spending changes that will begin to take effect in the new year. The two sides are still far apart in negotiations, however. The benchmark S&P index had fallen 5.3 percent between Election Day and Friday's rebound, as investors took the opportunity to sell stocks - including some of the year's best performers - just in case Washington cannot come to an agreement and taxes on dividends and capital gains rise in 2013. Monday's advance marked the biggest percentage gain for the S&P 500 since November 6, when the European Central Bank announced a new bond-buying program aimed at containing the region's debt crisis. Shares of Lowe's Cos Inc, the world's No. 2 home improvement chain, jumped 6.2 percent to $33.96 (USD) to hit a 52-week high after the company reported higher-than-expected quarterly profit and raised its full-year sales forecast. Home improvement chains tend to benefit as housing strengthens. U.S. home resales unexpectedly increased in October, while separate data showed homebuilder sentiment rose to its highest level in over six years in November. The Dow Jones industrial average gained 207.65 points, or 1.65 percent, at 12,795.96. The Standard & Poor's 500 Index was up 27.01 points, or 1.99 percent, at 1,386.89. The Nasdaq Composite Index was up 62.94 points, or 2.21 percent, at 2,916.07. Tyson Foods Inc beat expectations and gave an upbeat forecast, sending its stock up 10.9 percent to $18.72 (USD). Intel shares edged higher, up 0.3 percent to $20.25 after the company said its chief executive will retire in May.