Why Stocks Are Up Todayhttp://www.fool.com/investing/general/2012/11/19/why-stocks-are-up-today.aspx John Maxfield
November 19, 2012
Stocks are rallying today after good news swept across Wall Street. Roughly halfway through the trading session, the Dow Jones Industrial Average (INDEX: ^DJI ) is up 162 points, or 1.3%, in intraday trading.
Ever since the presidential election two weeks ago, the stock market has been struggling against concerns that lawmakers in Washington won't reach a deal in time to avert the draconian spending cuts and tax increases, known as the fiscal cliff, that are otherwise set to take place this January.
After a meeting between the democratic president and the republican speaker of the house at the end of last week concluded on a positive note, stocks broke a four-day losing streak. And over the weekend, the president said he is "confident" that the situation will be resolved in a timely manner.
Also adding to the rally was upbeat news from the housing sector. According to data released by the National Association of Realtors, sales of existing homes in October increased 2.1% from the preceding month and 10.9% over the same month last year. The association's chief economist even went so far as to note that we "may have a persistent inventory shortage situation next year." Bet you never thought you'd hear that again.
Shares of financial companies rallied on the back of this news. Bank of America (NYSE: BAC ) , the nation's second largest bank by assets, is currently leading the Dow higher, up 3.6% in intraday trading. JPMorgan Chase (NYSE: JPM ) , the largest bank by assets, isn't far behind, up more than 2%. Further fueling the rally in financial stocks was news that Citigroup (NYSE: C ) is on track to cut 300 sales and trading jobs and that it agreed to pay $360 million to settle a dispute with the brokerage estate of Lehman Brothers.
In addition, analysts at Stifel Nicolaus upgraded Bank of America to "buy." According to the client note containing the upgrade: "We like the combination of the company's potential EPS growth trajectory, its improved capital position and likely dividend increase, leverage to what is working in the current environment (mortgage ori