This Is the Reason the S&P 500 Has Embraced Fiscal Cliff-phoria

"Fiscal cliff-phoria," my term to describe the euphoria that people are feeling now that there's a resolution to the nation's tax crisis, continues to power the broad-based S&P 500 (SNPINDEX: ^GSPC  ) higher, despite mixed employment data.

Yesterday's ADP employment report appeared to suggest that hiring in December was going to be strong; however, the actual 155,000 bump in jobs, as reported by the U.S. Bureau of Labor Statistics, barely edged out estimates, and didn't budge the U.S. unemployment rate from 7.8%. Furthermore, the labor force participation rate remained at 63.6%, just 0.1% above a 31-year low, signaling that the labor force isn't expanding relative to population growth.

On the day, the S&P 500 rose 7.10 points (0.49%) to end at 1,466.47. More impressive than that, however, is that we saw a wide variety of sectors participating in today's rally, including telecom, energy, and pharmaceuticals.

For instance, landline, in-home broadband, and enterprise cloud provider Windstream (NASDAQ: WIN  ) continued its rally today, up another 5%. One of the potential implications of going over the fiscal cliff would have been to tax dividends as ordinary income. One reason Windstream attracts so many income-seeking investors is its current 11% yield. With dividend taxes rising only modestly, income-seeking investors will still be expected to turn to Windstream for dividend income. As for me, though, I'm not as certain it will be able to maintain its current yield given an ongoing rural landline exodus as mobile coverage expands.

Likewise, Chesapeake Energy (NYSE: CHK  ) in the energy sector had a nice gain, up 4.1%. Oil is currently trading at a three-month high, and oil and natural gas giant Chesapeake has been shifting its production from a natural gas bias, to producing more oil and natural-gas liquids. Ultimately, assuming CEO Aubrey McClendon can keep out of the limelight, Chesapeake's assets appear undervalued, and these higher commodity prices could help unlock shareholder value hidden deeply beneath Chesapeake's recent PR blunders.

Even big pharmaceutical company Eli Lilly (NYSE: LLY  ) joined to fray, rising 3.7%, after issuing a 2013 profit forecast that topped Wall Street's expectations. Eli Lilly's EPS forecast calls for $3.75-$3.90 this year versus an expectation on the Street of just $3.72. Before you get too excited, please keep in mind that Lilly is also facing patent exclusivity losses on antidepressant Cymbalta and insulin Humalog this year, on top of patent losses on Zyprexa last year. A vast majority of Eli Lilly's pipeline is at serious risk of generic competition in the next few years, and it's a name I'd just as soon avoid.

The biggest loser on the day for the S&P 500 was this little tech company known as Apple (NASDAQ: AAPL  ) , down 2.8%. Apple shares have been whipsawed to begin the New Year, as analysts on both sides of the aisle are using the world's largest company as a staging ground to voice their economic opinions. Only time, and its Christmas-season earnings report, will give us a clearer picture of where Apple stands, but given the legion of faithful Apple followers and its ability to generate upwards of $40 billion in cash annually, I have a strong suspicion the company is in great shape.

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