US stocks climbed for a second successive day as investors continued to stay optimistic about the likelihood of Washington politicians reaching a deal to avert the fiscal cliff before the December 31 deadline.
On Monday, President Barack Obama made a counter-offer to House Speaker John Boehner and Republicans that include higher tax rates from those earning more than $400,000 and $1.22 trillion in spending cuts, including some to social programs. In response, Boehner suggested a “Plan B” option that would increase tax rates only for those earning more than $1 million but defer spending cuts.
"I continue to have hope that we can reach a broader agreement with the White House," Boehner said in a press conference. "But at this point, having a back up plan to make sure that as few taxpayers are affected by this increase as possible is the right course of action for us."
The Dow Jones Industrial Average
(INDEXDJX:.DJI) was up 0.58% to 13,312.35 points as of 12:04 p.m. EST.
Financials continue to drive the fiscal cliff rally. Bank of America
(NYSE:BAC) led the charge, jumping 1.73% to $11.19. Earlier, high profile banking analyst Meredith Whitney upgraded the bank, along with Discover Financial
(NYSE:DFS) (+0.27%) and Citigroup
(NYSE:C) (+0.92%) to Buy from Hold. Bank of America is now up close to 90% year-to-date.
(NYSE:JPM) (+0.14%), American Express
(NYSE:AXP) (+1.41%), and other big financial names such as Goldman Sachs
(NYSE:GS) (+3.06%), Morgan Stanley
(NYSE:MS) (+3.13%), and Jefferies
(NYSE:JEF) (+2.41%), were also up on the day. The bellwether Financial Select Sector SPDR ETF
(NYSEARCA:XLF) (0.95%), which tracks all financial stocks in the S&P 500, is down 0.46% to $16.06.
Also responding positively to fiscal cliff developments were economically-sensitive stocks Alcoa
(NYSE:AA) (+1.66% to $8.90) and Caterpillar
(NYSE:CAT) (+1.29% to $90.80).
(NYSE:GE) was far and away the biggest Dow loser on the day, sliding 2.08% to $21.47. Earlier, CEO Jeff Immelt cut guidance for revenue growth at the company’s industrial businesses to 8% from 10%.
No positions in stocks mentioned.
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