For the second day in a row, the Dow Jones Industrial Average (DJINDICES:^DJI) rose at least 100 points as investors got a good feeling about the fiscal cliff. With time running out, political heads in Washington appear to be on their way to making an agreement that would avoid the automatic tax increases and spending cuts otherwise promised. For the blue chips today, it was a steady climb of 115 points, or 0.9%.
In today's cliff negotiations, President Obama agreed to some compromises on taxes and spending on social programs, while House Speaker John Boehner expressed optimism but said there was still work to be done. Boehner and his party hoped to gain more concessions from Obama and the Democrats and have rolled a "Plan B" if they can't win the concessions they desire.
Bank of America (NYSE:BAC) was again the biggest gainer on the Dow, moving up 3.3% as financial stocks are particularly sensitive to macroeconomic news. The stock also appears to be riding the wave from yesterday's endorsement from Meredith Whitney, who said that several banks including B of A and Citigroup look as appealing as they have years.
Hewlett-Packard (NYSE:HPQ) was another solid gainer, jumping 2.3% a day after dropping more than 3% after an analyst said a breakup would not add value. Investors also seemed unfazed by a downgrade today from Topeka Capital, whose analyst, Brian Kelly, said that the stock still faces considerable competition and that shareholders should use the recent rally as a selling opportunity. HP may get a boost from Oracle, which beat earnings estimates in its quarterly report today, giving a vote of confidence to the flailing PC industry.
On the other side of the spectrum, General Electric (NYSE:GE) fell by 1.1% as the company last night lowered its 2012 guidance and expressed concerns about the fiscal cliff's effect on its near-term business. The conglomerate giant also announced an acquisition of Italian aerospace group Avio for $4 billion, a component maker that already does two-thirds of its business with GE.
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