While stocks began the day in the red, they've since moved into positive territory as optimism over the fiscal cliff negotiations has taken hold. With roughly an hour left in the trading session, the Dow Jones Industrial Average (^DJI -0.25%) was up by 50 points, or 0.38%.
Every year, northern Michigan's Lake Superior State University compiles its List of Words to be Banished from the Queen's English for Misuse, Overuse, and General Uselessness. Can you guess what phrase received the most nominations for the list this year? If you guessed "fiscal cliff," pat yourself on the back. According to one submission: "If only those who utter these words would take a giant leap off of it."
For those of you who share this feeling, the good news is that the dreaded phrase may soon be relegated to the dustbin of history. The bad news, however, is that it hasn't been yet. And we're at least stuck with it through the end of today.
According to The Wall Street Journal, the White House and Senate Republicans are "closing in on a budget comprise." The emerging deal will purportedly raise tax rates (including dividends and capital gains) on households earning more than $450,000 a year, and include spending cuts affecting a still-undetermined number of federal programs.
On the Republican side, Sen. John McCain stated that "we're closer than one would think." And on the Democratic side, President Obama noted that "It appears that an agreement to prevent this New Year's tax hike is within sight, but it's not done."
In response to these comments, stocks rose sharply just before 1 p.m. ET. Leading the way higher are Hewlett-Packard (HPQ -0.08%) and Caterpillar (CAT -0.39%), up 3.2% and 2.6%, respectively. Suffice it to say, both companies will benefit tremendously from the decrease in uncertainty surrounding the fiscal situation and the presumed, concomitant increase in business investment.
Leading a handful of stocks lower, alternatively, are Verizon (VZ -1.20%) and DuPont (DD), down 0.21% and 0.11%, respectively. Given how close these stocks are to positive territory, it wouldn't be surprising to see them end in the green for the day if a deal is reached before the market closes.
