Fiscal Cliff Optimism Buoys the Dow

Don't let it get away!

Keep track of the stocks that matter to you.

Help yourself with the Fool's FREE and easy new watchlist service today.

Fiscal cliff fears gave way to euphoria as Congress may have agreed on terms for a tentative deal and the news sent stocks soaring, despite an announcement later that the House would not vote tonight and that, therefore, the U.S. would technically go over the cliff, if temporarily.

The Dow Jones Industrials (INDEX: ^DJI  ) soared 166 points, finishing the year with an 886-point gain, or about 7%, before considering the impact of dividends. The S&P 500 finished with a more impressive 13% gain for the year, besting last year's flat performance.

All 30 Dow stocks gained ground on the day, but the biggest gainers were predictably ones that have been most sensitive to the economy all year. Caterpillar (NYSE: CAT  ) jumped more than 3%, while General Electric (NYSE: GE  ) rose 2.7% and Bank of America (NYSE: BAC  ) added to its huge gains with another 2.2% advance. For B of A, another piece of good news comes from reports that it and other banks may be close to reaching a settlement with the Office of the Comptroller of the Currency to resolve mishandling of foreclosures during the mortgage crisis. Meanwhile, for Caterpillar and GE, news that manufacturing conditions in China have improved points to the possibility of better growth for the industrial giants in the coming year.

But the big winner of the day was Hewlett-Packard (NYSE: HPQ  ) , which soared more than 4%. The company got good news when it held onto a Veterans Affairs Department contract worth more than half a billion dollars over protests from rival IBM that the department didn't appropriately consider other proposals. After reconsideration, though, the VA made no changes. Still, the longer-term question for HP is whether it can truly rebound from its horrific performance in 2012. If so, value investors could be rewarded for their courage.

Learn more about HP
HP could easily be the story of 2013 if it can dig itself out of its massive hole. Still, there's real risk that HP could be a value trap waiting to snare unsuspecting investors with unrealistic hopes of recovery. Find out what's in store for HP in 2013 and beyond by reading the Fool's premium research on the stock, in which our technology analyst details exactly what investors need to know. Just click here now to get your copy today.

Read/Post Comments (0) | Recommend This Article (3)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2174067, ~/Articles/ArticleHandler.aspx, 10/21/2016 8:17:52 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated Moments ago Sponsored by:
DOW 18,145.71 -16.64 -0.09%
S&P 500 2,141.16 -0.18 -0.01%
NASD 5,257.40 15.57 0.30%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

10/21/2016 4:00 PM
BAC $16.67 Up +0.11 +0.66%
Bank of America CAPS Rating: ****
CAT $86.33 Down -0.30 -0.35%
Caterpillar CAPS Rating: ***
GE $28.98 Down -0.09 -0.31%
General Electric CAPS Rating: ****
HPQ $13.80 Down -0.30 -2.13%
HP CAPS Rating: ***