Stocks Rally on Fiscal Cliff Progress and a Sweet Apple Turnover

By Minyanville Staff  DEC 17, 2012 5:00 PM

Today's financial recap and tomorrow's financial outlook.

 


MINYANVILLE ORIGINAL Stocks turned in a very strong day on encouraging news regarding the fiscal cliff.

Over the weekend, House Speaker Boehner indicated that he was willing to compromise on tax rates and the debt ceiling. And today, Bloomberg reported that President Obama was weighing concessions on Social Security in budget talks.

The increasing likelihood of a compromise in Washington drove a decidedly "risk-on" day, with significant outperformance in financial stocks, small caps, and energy. We also saw weakness in Treasuries after a disappointing two-year note auction in the afternoon.

Importantly, the S&P 500 (INDEXSP:.INX) finished at the highs of the day. In recent weeks, it's been common for stocks to start the day strong and finish weak after momentum wanes.

We also saw a nice turnaround in Apple (Nasdaq:AAPL) today. The stock dipped as low as $496.69 in pre-market trading on a number of negative research notes out of Wall Street, including a Citigroup downgrade to Neutral from Buy.

Tuesday's Financial Outlook

Before the open, we'll see earnings from investment bank Jefferies (NYSE:JEF). This earnings may give important insights into the health of Wall Street, which is critical to the health of the broader markets.

After the close, tech heavyweight Oracle (Nasdaq:ORCL) will report earnings. The company should provide important commentary regarding the state of IT spending, an important topic given the normally reliable IBM's (NYSE:IBM) earnings disappointment in October.

In economics, investors should be watching the December NAHB Housing Market Index report, which comes out at 10:00 am ET.

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