Stocks are rallying today after good news swept across Wall Street. Roughly halfway through the trading session, the Dow Jones Industrial Average (DJINDICES:^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 origination and debt underwriting) and our belief that it is under-owned. These traits make BAC shares a relatively attractive place to be in a sector struggling for catalysts."
Shares of home improvement retailer Lowe's (NYSE:LOW) are also up considerably today after the company reported better than expected third-quarter sales and earnings. Net income rose to $0.35 per share over $0.18 per share in the same quarter last year. And excluding one-time items, the figure was $0.40, handily beating analyst estimates of $0.35.
Even more important for Lowe's, its same-store sales figure increased to 1.8%. While this was the 14th consecutive quarter that the company underperformed rival Home Depot (NYSE:HD) with respect to this pivotal metric, which reported third-quarter comps of 4.3%, it's nevertheless closing the gap. According to Reuters, last quarter's 2.5 percentage-point gap was dramatically better than the traditional gap of 3 to 3.5 percentage points.
Finally, shares of Intel (NASDAQ:INTC) were down briefly earlier in the day after the chipmaker announced that its CEO Paul Otellini will be stepping down this coming May. The decision to retire purportedly surprised Intel's board and is said to be Otellini's alone. According to the Wall Street Journal, the move is a departure to Intel's historical pattern of only replacing CEOs at the mandatory retirement age of 65. Otellini is only 62.
The Foolish bottom line
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