U.S. stocks rise on hopes for fiscal-cliff talks
NEW YORK — U.S. stocks climbed Monday, lifting the Dow Jones industrial average and the S&P 500 to their highest levels since Election Day, as Wall Street banked on a deal to avert automatic tax increases and spending cuts slated to start in January.
“I think the assumption is there is more going on than they are telling us,” said Ron Florance, managing director of investment strategy at Wells Fargo & Co.
“It may be wishful thinking, or it may be they’ve taken some responsibility,” said Florance of the budget negotiations.
Up for a fourth consecutive session, its longest winning run since October, the Dow climbed 14.75 points, or 0.1 percent, to 13,169.88, with technology companies led by Hewlett-Packard Co. and Cisco Systems Inc. pacing gains.
McDonald’s Corp. rose 1.1 percent after the fast-food chain reported a 2.4 percent gain in global sales last month.
The McDonald’s release “would have moved the market six months ago, but everything is just on hold,” said Florance.
Also up for a fourth consecutive session, the S&P 500 index rose half a point to 1,418.55.
“The narrow trading range of 1,386 to 1,433 on the S&P is still intact. A breakout to the upside on a cliff deal could take the S&P back up to the early-year high at 1,474, assuming the rally lasts more than two days,” Elliot Spar, market strategist at Stifel Nicolaus & Co., wrote in emailed comments.
“Then reality will set in: It’s still an economy growing at 2 percent, and higher taxes and lower government spending are drags on growth and not upside catalysts,” Spar added.
The Nasdaq composite index added 8.92 points, or 0.3 percent, to 2,986.96.
American International Group Inc. fell after the insurer pegged the cost of Hurricane Sandy and its aftermath at roughly $1.3 billion.
Shares of Apple Inc. declined 0.6 percent after Jefferies Group Inc. reduced its share-price outlook.
The yield on the 10-year Treasury note used in determining mortgage rates and other consumer loans traded at 1.62 percent.
In the view of Dan Greenhaus, chief global strategist at BTIG LLC, Treasury yields will likely remain where they are, given expectations of continuing support from the Federal Reserve. With economic growth and inflation expectations also curbed, “we do not see yields sustainably breaching the 2.0 percent level in 2013,” he said.
The euro held a slight edge against the U.S. dollar, and the price of oil reversed lower, with a barrel of crude down 37 cents to $85.56 a barrel.
Last week, the Dow industrials gained 1 percent from the prior Friday’s close, with the index rising on the hope White House and Republican congressional leaders would eventually reach an accord.