This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Who's Afraid of the Fiscal Cliff? Stocks Soar

NEW YORK (TheStreet) -- The major U.S. stock averages soared Monday as positive housing market data gave extra mileage to a rally fueled by optimism over budget talks in Washington.

Upbeat earnings reports from Lowe's (LOW) and Tyson Foods (TSN) also boosted investor confidence after last week's deep pullback. The surge occurred despite rising tensions in the Middle East as Israeli and Palestinian forces continued to exchange rocket fire in the Gaza Strip area.

The Dow Jones Industrial Average spiked higher by nearly 208 points, or 1.65%, to close at 12,796. The blue-chip index, which has lost ground in five of the past six weeks, is now up 4.7% so far in 2012.

All thirty of the Dow's components finished in the green. Even Intel (INTC), which was in negative territory for much of the session after surprising Wall Street with news that Paul Otellini plans to retire from the chip giant's chief executive officer in May, managed a slight gain.

The biggest blue-chip winners were Bank of America (BAC), Hewlett-Packard (HPQ), JPMorgan Chase (JPM), and Verizon (VZ).

The S&P 500 gained 27 points, or 1.99%, to close at 1387, while the Nasdaq climbed 63 points, or 2.21%, to settle at 2916.

Every sector in the broad market was higher with basic materials, capital goods, consumer cyclicals, energy, technology, and transportation all rising more than 2%.

Advancers outpaced decliners by about a ratio of 7.8-to-1 on the New York Stock Exchange and 3.7-to-1 on the Nasdaq. Volume totaled 3.36 billion on the Big Board and 1.77 billion on the Nasdaq.

U.S. budget discussions are expected to continue behind the scenes in Washington this week as President Barack Obama makes his tour through Asia. The president has provided reassurances that a U.S. budget agreement will be reached on time.

"Attention remains centered on the fiscal cliff," said Michala Marcussen, global head of economics at Societe Generale. "Recent developments give grounds for some cautious optimism, but history suggests that politics can be notoriously fickle. Our base case remains that a temporary extension is voted before year-end with a final agreement in early 2013. This will lift uncertainty and remove a significant headwind to recovery."

1 of 3

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 16,915.07 -70.54 -0.42%
S&P 500 1,964.68 -8.15 -0.41%
NASDAQ 4,396.2040 -22.83 -0.52%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto
Advertising Partners

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs