After spending the last few months fluctuating according to developments in the fiscal cliff saga, US stocks soared on the first trading of 2013 after lawmakers in Washington managed to reach a deal to avert a series of automatic spending cuts and tax hikes.
"We spent November and December ignoring a lot of good [fundamental] news as we waited to see how this fiscal cliff would unfold," said Art Hogan, managing director at Lazard Capital Markets, according to CNBC
. "The market's reacting in an appropriate fashion because we're halfway home and there's some middle ground…So some pent-up demand for stocks is coming back into the market."
The Dow Jones Industrial Average
(INDEXDJX:.DJI) was up 1.67% to 13,322.82 points as of 11:56 a.m. EST, with all 30 blue chips firmly in the green.
(NYSE:HPQ) led the fiscal cliff resolution-initiated surge, soaring 5.17% to $14.99. Caterpillar
(NYSE:CAT) (+4.19% to $93.36) and Alcoa
(NYSE:AA) (+2.42% to $8.89) also jumped in intraday trading.
Financials also received a strong fiscal cliff boost. Bank of America
(NYSE:BAC) advanced 3.27% to $11.99, while JPMorgan
(NYSE:JPM) improved 1.44% to $44.30. Earlier, Evercore added Bank of America to its Conviction list.
Other sector heavyweights such as American Express
(NYSE:AXP) (+2.09%), Goldman Sachs
(NYSE:GS) (+2.12%), Citi
(NYSE:C) (+3.67%), and Morgan Stanley
(NYSE:MS) (+2.30%) also rose on the day. The bellwether Financial Select Sector SPDR ETF
(NYSEARCA:XLF), which tracks all financial stocks in the S&P 500
(INDEXSP:.INX), was up 2.20% to $16.75.
Relatively underperforming stocks on the day were defensive picks such as Merck
(NYSE:MRK), which inched up 0.15% to $41.00, and Johnson & Johnson
(NYSE:JNJ), which gained 0.66% to $70.56.
No positions in stocks mentioned.
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