The Dow Jones Industrial Average (^DJI 0.21%) made strong gains today on hopes for a resolution on the fiscal cliff mess and continued stimulus from the Federal Reserve when it reports the results of its two-day meeting tomorrow. The blue chips scored their fifth straight day of gains today, finishing up 79 points, or 0.6%. With today's jump, the Dow has now made back all of its post-election losses.
Investors seemed to sniff out some progress on the fiscal cliff negotiations, as insiders have said that the two parties are making headway despite public silence, according to an article in The Wall Street Journal. Still, there was some public sparring again, as Republicans demanded that Democrats name specific spending cuts they would make. Senate Minority Leader Harry Reid responded by saying that Republicans had to say what they wanted to cut and that he couldn't "read their minds," adding that it will be "extremely difficult" to pass legislation on the cliff before Christmas.
The Federal Reserve's Open Market Committee decision is due out tomorrow at 12:30 p.m. ET, and many analysts expect the central bank to announce a new bond-buying program to encourage corporate borrowing. Also boosting markets today was data out of Germany showing that a widely followed investor-sentiment index jumped to 6.9 on expectations of -12.0. The report fed hopes that Germany might avoid the recession engulfing the eurozone.
On the big board today, Intel (INTC -0.44%) led Dow stocks with a gain of 2.8% after launching a data-center chip to serve the fledgling microserver market. Facebook (META -1.37%), for one, saluted the move, as the low-power chips are especially well suited to processing the crush of information that the social-networking site receives.
Wal-Mart (WMT 0.34%) was the biggest loser today out of the blue chips, falling 1.8% as Indian officials may seek an inquiry into questions about the retail giant's lobbying effort in the world's second-biggest country. Corporate lobbying is banned in India, but an Indian media outlet recently reported that Wal-Mart spent part of its $25 million in foreign lobbying expenditures in the subcontinent. The development is the latest PR headache for Wal-Mart, which was exposed as having bribed Mexican officials earlier this year.
In other news, today was chock-full of deal-making, as Liberty Interactive's John Malone bought a large stake in TripAdvisor, Delta paid $360 million for a piece of Virgin Atlantic, and plans moved forward for the US to sell its remaining shares in AIG after bailing out the financial giant in 2008.
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