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Overreactions to reported progress have stocks soaring today.
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It's a triple-digit day for the Dow Jones Industrial Average (INDEX: ^DJI), buoyed by -- you guessed it -- the fiscal cliff. With Wall Street full of optimism today, the Dow has risen to 108 points, or 0.8%, as of 2:15 p.m. EST. After a report surfaced about progress on the cliff's solution, the markets haven't looked back; currently, only two of the Dow's members are in the red, with numerous stocks recording gains of more than 1%. Let's get caught up on the action.
Fiscal-cliff overreactions aplenty
An article from The Wall Street Journal came out earlier today mentioning progress on budget talks between House Speaker John Boehner and the White House, fueling an optimistic surge by the markets. While the report isn't definitive proof that a solution is on the way, the major indexes have blown up on news about the fiscal cliff in recent sessions, swinging far into the black or red at the slightest hint of progress or setbacks. Until Congress finds an actual solution, expect that trend to continue.
Still, it sure has been easy going for the Dow's stocks today, and two tech stocks that have recently struggled are leading today's charge. Microsoft (MSFT +0.01%) and Intel (INTC +0.00%) rank among the top Dow leaders with shares gaining 1.8% and 3%, respectively. Positive iPhone sales news from Apple (AAPL +0.01%) and narrowed guidance from Texas Instruments (TXN 0.01%) have taken the entire tech sector higher, and the Nasdaq Composite (INDEX: ^IXIC) is currently up more than 1.4%.
The fiscal-cliff optimism is doing wonders for some stocks slated to be hit the hardest should Congress fail to find a solution. Industrial giants Alcoa (AA +0.00%) and Caterpillar (CAT +0.01%) both have recorded gains today, up 1.4% and 0.4%, respectively. It's a rare bit of hope for two stocks with years to forget, as Alcoa and Caterpillar have both lost more than 7% year to date. Should the fiscal cliff come to pass, however, it's likely that 2013 would be even worse.
Only Wal-Mart (WMT +0.00%) and McDonald's (MCD +0.00%) have seen shares sink on the day, with losses of only a fraction of a percent for each. It hasn't been a great day for big-box retailers at large as Wal-Mart and several rivals sink. McDonald's, on the other hand, is down after it surged yesterday on upbeat sales-growth figures. With some analysts cautioning that those numbers could simply be a blip, rather than a trend, investors will have to watch for strong December sales from the fast-food chain to regain confidence following losses of nearly 10% on the year.
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