We're going to have an answer one way or another regarding the fiscal cliff by Jan. 1. Either an across-the-board tax hike will go into effect in conjunction with defense sector spending cuts, or political leaders from both sides are going to need to hash out a plan that actually works for the American people. Today, both parties expressed optimism that they'll indeed get a deal done before Jan. 1; however, as my Foolish colleague Dan Caplinger notes, betting your financial future on a group of politicians is usually not the smartest move.
On the day, the S&P 500 (^GSPC +0.72%) advanced 6.55 points (0.48%), to 1359.88, bucking a three-day slide.
Leading the charge higher were online travel booking and review sites Expedia (EXPE 1.43%) and TripAdvisor (TRIP +0.75%), which was spun off from Expedia late last year. Both companies finished the day approximately 4% higher and have benefited from strong domestic and international travel and hotel bookings. In addition, priceline.com's (PCLN 0.60%) purchase of Kayak Software (NASDAQ: KYAK) has ignited speculation within the sector that we could see additional acquisitions. Either way, both companies appear to be running on all cylinders.
Video game and accessories retailer GameStop (GME 1.22%) also had a strong day, rising 4%, after noting plans to close 200 stores, or about 3% of its total stores, by the end of next year. In addition, Activision Blizzard (ATVI +0.00%) announced that first-day sales of its new Call of Duty game hit a record, $500 million. That's great news for gaming retailers like GameStop.
Leading to the downside is electronic big box retailer Best Buy (BBY +0.17%), whose investors are getting a head start on the selling that usually ensues when it reports earnings. Best Buy is slated to report earnings next Tuesday and, given its lackluster forecast, investors aren't expecting much. Amazon.com (AMZN +1.10%) continues to lure customers to purchase from it instead of Best Buy, because of both convenience and price. Best Buy's new tactic to match pricing may help reverse that trend, but probably won't change what will likely be a dismal third-quarter report. Shares dipped 8% today.
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