What's Driving Stocks Today?

Another day, another opportunity to worry about the fiscal cliff.

Stocks are modestly higher in midday trading, as politicians continue to communicate their stalemate over fiscal cliff negotiations. Currently the Dow Jones Industrial Average (^DJI -1.55%) is up a barely discernible 5 points, or 0.04%, with 13 of the blue chip index's stocks lower and 17 trading higher.

In an interview with CNBC, the CEO of Bank of America (BAC -1.68%), Brian Moynihan, said that the uncertainty surrounding the fiscal cliff has already had a negative impact on business spending for next year and that a failure to reach an accord could extend the deleterious consequences into 2014. According to Moynihan, "I'm more concerned about business behavior slowing down than I am about consumer behavior. I think we're in danger if this thing strings out into 2013 that you could start to have problems of what 2014 would look like."

With respect to individual stocks, the best-performing component of the Dow today is Intel (INTC 0.49%). Earlier this morning, the chip maker announced its plan to sell bonds in a benchmark three-part offering to fund stock repurchases. Since the beginning of the year, shares in the company are down 15%, including reinvested dividends. On the day, they're up 1.5% in midmorning trading. For two great commentaries on Intel, check out Fool Anders Bylund's "It's Time to Buy Intel!" and our analyst debate, "Is It Time to Dump Intel?"

Meanwhile, shares in both Bank of America and JPMorgan Chase (JPM -0.07%) are both lower despite a positive report on bank profits. According to an FDIC press release, commercial banks and savings institutions insured by the institution reported combined net income of $37.6 billion last quarter, a $2.3 billion, or 6.6%, improvement from the $35.2 billion in profits the industry reported in the same quarter last year. It was the 13th consecutive quarter that aggregate earnings increased on a year-over-year basis, and the sixth such quarter that the number of lenders on the FDIC's problem list fell.

In prepared remarks, FDIC Chairman Martin Gruenberg noted: "This was another quarter of gradual but steady recovery for FDIC-insured institutions . . . . Signs of further progress were evident in a number of indicators, such as loan growth, asset quality and profitability."

Also fueling today's modest early-morning rally in stocks was an earnings report by Toll Brothers (TOL -2.11%), a luxury homebuilder based out of Horsham, Pa. For the company's fiscal fourth quarter, compared to the same time period last year, revenues rose 48%, contracts increased by 75%, and the backlog grew by 70%. According to Toll Brothers' CEO, Douglas Yearley, Jr.: "Pent-up demand, rising home prices, low interest rates, and improving consumer confidence motivated buyers to return to the housing market in FY 2012. As household formations accelerated and unsold home inventories dropped to record lows, the industry took further steps toward a sustained housing recovery."

For investors watching developments in the housing market, as my colleague Morgan Housel has discussed previously, it's notable that Yearley's upbeat remarks add to a growing consensus of similar claims made by executives at other publicly traded homebuilders. Among others, Jeff Mezger of KB Homes (KBH -1.76%) noted: "We're on offense and pursuing our growth targets. . . . The housing market recovery is accelerating as inventory continues to decline and prices are now rising." And the CEO of Hovnanian (HOV -4.70%), Ara Hovnanian, said:

We are undoubtedly well on the recovery route. It's not a question of are we beginning it. I'd say it began at the beginning of this year and that's not just for Hovnanian, that's for the entire industry. That means we're all going to start building, which means we're going to be hiring, and that will boost employment and help strengthen the economy overall.