NEW YORK (
) -- The major U.S. stock averages surged Wednesday on fresh hopes that the Democrats and Republicans will be able to work out a compromise during U.S. budget talks and avoid the fiscal cliff.
Both President Barack Obama and House Speaker John Boehner made positive statements about the progress being made on Capitol Hill.
Dow Jones Industrial Average
rose nearly 107 points, or 0.83%, to close at 12,985, after having been down by more than 100 points earlier in the session. The blue-chip index, which ended a two-day losing streak, is now up 6.3% so far in 2012.
Breadth within the Dow finished very positive with winners ahead of losers, 27 to 3. Prominent gainers among the blue chips were
The biggest percentage losers were
added 11 points, or 0.79%, at 1410, while the
gained 24 points, or 0.81%, at 2992.
Every sector finished higher, led by conglomerates, consumer cyclicals, and services.
shares, however, fell 0.31%. The iPhone maker reportedly fired William Richardson, the tech giant's senior director of iOS services, over the failure of its new Maps app. Richardson was fired before Thanksgiving, the report said.
Volume totaled 3.34 billion on the New York Stock Exchange, and 1.73 billion on the Nasdaq. Advancers ran ahead of decliners by a 2.3-to-1 ratio on the Big Board and 1.4-to-1 on the tech-heavy index.
BNP Paribas economists said in a note that "we remain optimistic that a deal will be reached before year-end that will defer the bulk of the fiscal cliff."
However, the BNP economists added that the base effects and ongoing uncertainty over the fiscal cliff and the near-term impact of Hurricane Sandy are likely to leave investment growth negative in the fourth quarter.
"After the fiscal cliff, it's going to be the debt ceiling, so there's always going to be these potential issues on our forefront ... there's always these continuing issues," said Brian Peery, co-portfolio manager at Hennessy Funds. "So I think right now the American public is just so disappointed that they're acting more like children than like Congressmen and I think if we can just turn that situation around and have our politicians looking really for our best interest as a country, I think everybody will feel a lot better about it."
The Census Bureau reported Wednesday that new-home sales fell to an annual pace of 368,000 in October from a downwardly revised 369,000 in September. Economists were expecting new-home sales of 390,000 in October.
BNP Paribas economists noted that October's 32% decline in the Northeast was likely a result of Hurricane Sandy's disruptions at the end of the month, and offset by a 62% jump in sales in the Midwest, as the South and the West experienced smaller movements in the month.
"The Census report collects data for new single-family houses, but does not capture the recent strength in rental demand, most of which is reflected in a boost in multifamily construction activity," they said. "Slower progress in the single- family sector than in the multifamily sector is consistent with much of the pick-up in residential demand being driven by investors rather than owner-occupiers. Nonetheless, we expect new single-family housing demand to continue its modest upward trend throughout the next year, driven by record-high affordability."
The FTSE 100 in London closed up 0.06% on Wednesday, while the DAX in Germany added 0.15% despite uncertainties over the U.S. fiscal cliff and debt ceiling and skepticism about Greece's debt deal.
The European markets cut some of their losses as the trading session progressed after a decent Italian debt auction and the European Commission gave the green light on the restructuring of four Spanish banks, paving the way to their ability to tap into funds from the European Stability Mechanism.
Japan's Nikkei average settled lower by 1.22% and Hong Kong's Hang Seng index finished off by 0.62% as worries persisted that a fall by the U.S. over the fiscal cliff could help tip the world economy into a recession.
Gold for December delivery was off $25.80 to settle at $1,716.50 an ounce at the Comex division of the New York Mercantile Exchange, while January crude oil contracts were off 69 cents to close at $86.49 a barrel.
The benchmark 10-year Treasury rose 3/32 to dilute the yield to 1.630%. The dollar lost 0.05%, according to the
U.S. dollar index.
In corporate news,
Green Mountain Coffee Roasters
Wall Street's expectations in its fiscal fourth quarter. Shares surged 27.3%.
American Eagle Outfitters
shares jumped 7.1% after the Pittsburgh-based teen apparel and accessories retailer hiked its full-year outlook to $1.38 to $1.40 a share from its previous outlook of $1.33 to $1.36 a share as it posted better-than-expected third-quarter results.
shares advanced 8.9% after the specialty apparel and accessory retailer booked stronger-than-anticipated fiscal third-quarter profit and gave higher-than-estimated fourth-quarter guidance amid strength in its Black Friday sales.
shares tumbled 12.4% amid some concerns about the company's full-year guidance. Fresh Market posted third-quarter profit that was in line with expectations.
, the warehouse retailer, plans to pay a special dividend of $7 a share, or about $3 billion. Costco also said Wednesday that first-quarter sales jumped 10%. Shares popped 6.3%.
has emerged as the early front-runner to buy
Knight Capital Group
in a deal expected to value the brokerage firm at more than $1 billion,
The Wall Street Journal
reported, citing people briefed about the continuing sale talks.
Knight's board is expected to get takeover offers as early as this week from Virtu and
, two high-speed trading firms. Knight Capital shares soared 15.2%.
, the owner of brands such as Calvin Klein and Tommy Hilfiger, said Tuesday that fiscal third-quarter profit rose 47%. Shares rose 6.6%.
shares fell 4.3% after the firm announced the public offering of 5 million shares of its common stock at a $13.75 a shares, with the intention of using proceeds to repay a portion of its outstanding debt.
shares tacked on 3.8% after being upgraded to overweight from neutral at Piper Jaffray.
-- Written by Andrea Tse and Joe Deaux in New York.
>To contact the writer of this article, click here: