NEW YORK ( TheStreet) -- The major U.S. stock averages finished higher Friday as investors were cheered by positive commentary coming out of initial fiscal cliff discussions between President Barack Obama and congressional leaders. John Boehner, the Republican Speaker of the House, was quoted as saying he believes the fiscal cliff -- which refers to a combination of tax rate increases and spending cuts scheduled to take effect on Jan. 1 -- can be averted. Escalating Middle East tensions remained a focus for the market, however, as Israel was reportedly preparing for a possible invasion of Gaza as Palestinian forces launched rocket fire at Jerusalem. The Dow Jones Industrial Average rose nearly 46 points, or 0.37%, to close at 12,588. The blue-chip index snapped a four-day losing streak and ended the week down 1.77%. For the year, the Dow is still up 3.03%. Breadth was positive when the closing bell sounded with winners ahead of losers, 22 to 8. The biggest percentage gainers were Alcoa ( AA), American Express ( AXP), Home Depot ( HD), and UnitedHealth ( UNH). The leading Dow decliners were AT&T ( T), Hewlett-Packard ( HPQ), Verizon ( VZ), and Wal-Mart Stores ( WMT). HP shares lost nearly 2% following weak quarterly results and a poor outlook from fellow PC giant Dell ( DELL). The S&P 500 tacked on nearly 7 points, or 0.48%, to settle at 1360, while the Nasdaq gained more than 16 points, or 0.57%, at 2853. The S&P 500 lost 1.45% for the week and is now up 8.13% year-to-date, and the Nasdaq slid 1.78% for the week and is now up 9.52% in 2012. The strongest sectors in the broad market were consumer cyclicals, health care and utilities. Transportation was the only group to finish in the red. Winners outran losers by a nearly 3-to-1 ratio on the New York Stock Exchange, and a 1.5-to-1 ratio on the Nasdaq. Volume totaled 4.04 billion on the Big Board and 2.19 billion on the Nasdaq. "I doubt we'll see anything concrete for quite a while," said Stephen Guilfoyle, U.S. economist at Meridian Equity Partners, of the budget negotiations. "I am certain that both sides will come out and say something positive because that's their job. They're going to make their constituents think they're working for them, and they're trying to make the press and the markets believe that things are moving in the right direction, so you'll probably hear some positive headlines."
"The market wants to move, so the market is going to look at every little headline, every little snippet, every little gaffe, they're going to magnify those, and I think they will react in kind," said Guilfoyle. Friday's economic data provided little to get excited about. The Federal Reserve said industrial production declined 0.4% in October after having increased by a downwardly revised 0.2% in September. Capacity utilization fell 0.4 percentage points to 77.8%, a rate 2.5 percentage points below its long-run average, and down from a downwardly revised 78.2% the prior month. The Fed said that Hurricane Sandy, which held down production in the Northeast region at the end of October, is estimated to have reduced the rate of change in total output by nearly 1 percentage point. Economists were expecting the data to show a 0.2% rise in October output after a 0.4% increase in September, and capacity utilization levels of 78.3%. The European markets were weak Friday. The FTSE 100 in London finished down by 1.25%, while the DAX in Germany settled off 1.22%. On Friday, Greece looked to have managed to avoid defaulting on Treasury bills after raising enough proceeds through bond auctions this week, though it still remains in urgent need of bailout money. Eurozone finance ministers are expected to convene next Tuesday to discuss unlocking more financial aid for the country. "I don't know how going forward they're
Greece is going to do anything other than beg for these loans that they need from the Troika," said Guilfoyle. "Now, should we go that route? I don't know. I think the Troika needs to cut the official sector debt, but they should cut the official sector debt the way they gave their private sector the hair cut. So if the official sector were to take a hair cut, they could really help Greece out. The official sector has owed 70% of all the money that Greece owes." Japan's Nikkei average finished higher by 2.2% Friday as monetary stimulus hopes continued to prevail. Hong Kong's Hang Seng index rose by 0.24%, with investors staying cautious amid a lack of clarity about the policies that could arise from China's big leadership change.
Gold for December delivery settled up 90 cents at $1714.70 an ounce at the Comex division of the New York Mercantile Exchange, while January crude oil contracts rose $1.05 to close at $86.92. The benchmark 10-year Treasury rose 3/32, diluting the yield to 1.585%. The dollar advanced 0.22%, according to the
U.S. dollar index. In corporate news, shares of Foot Locker ( FL) rose more than 4.5% after the athletic footwear and apparel retailer reported better-than-expected third-quarter results, with earnings per share of 63 cents on revenue of $1.524 billion as comparable-store sales jumped 10.2%. Facebook ( FB) shares surged more than 6% with investors likely encouraged by a show of strength in shares this week despite the expiration of a big share lockup. Dynavax ( DVAX) shares plunged more than 47% after a U.S. regulatory advisory committee failed to extend adequate approval to the clinical-stage biopharmaceutical company's hepatitis B vaccine. Getco Strategic Investments revealed a 23.8% stake in brokerage firm Knight Capital Group ( KCG), sending Knight shares up 6.4%. Penn National Gaming ( PENN) will be split into a gaming-based real estate investment trust and a gaming operator, both publicly traded. The stock jumped more than 28%. J.M. Smucker ( SJM) raised its full-year guidance to earnings of $5.12 to $5.22 a share from $5 to $5.10 a share, saying that the branded food products company is "well-poised" for the holiday season and another year of growth. The stock fell nearly 2%. Shares of Dell dropped 7% after the company came up short in its latest quarter and gave a lackluster outlook. Dell posted third-quarter non-GAAP profit of $679 million, or 39 cents a share, on revenue of $13.72 billion, below analysts' expectations of earnings of 40 cents a share on revenue of $13.89 billion. Dell said it expects a "challenging macro-economic environment" to continue into the fourth quarter and forecast sequential revenue growth of 2%-5% for the January-ending period, implying revenue of $13.99 billion to $14.41 billion. Analysts forecast revenue of $14.48 billion in the quarter. For the full year, Dell stuck to its forecast for non-GAAP earnings of at least $1.70 a share, below the analysts' estimate of $1.73 a share.
Sears Holdings ( SHLD) , the department store operator, posted a quarterly loss of $498 million, or $4.70 a share, on revenue of $8.86 billion, wider than its year-earlier loss of $421 million, or $3.95 a share, on revenue of $9.41 billion. Shares fell nearly 19%. Shares of Schiff Nutrition International ( SHF) jumped 29% after the company received a buyout bid of $1.4 billion from Reckitt Benckiser. The bid of $42 a share tops a bid of $34 a share that Schiff, the vitamin maker, received from Bayer on Oct. 30. --Written by Andrea Tse in New York. >To contact the writer of this article, click here: Andrea Tse. Follow @Commodity_Bull