Finally. Politicians stopped twiddling their thumbs and made some tangible progress in the fiscal cliff talks, sparking a day-long rally on Monday. Although a final deal looks unlikely by midnight, lawmakers agreed on all tax-related issues, one of the larger political challenges in the whole process.
Despite the agreement, mistletoe was conspicuously absent in the negotiations. The Dow Jones Industrial Average (DJINDICES:^DJI) added 166 points, or 1.3%, to close at 13,104. The index gained 7.3% this year.
Now, we all know that corporations -- certain tax laws aside -- aren't actually people. But if Bank of America (NYSE:BAC) were an actual person, it would be laughing maniacally at the Dow's "pitiful" 7.3% advance. While drawing on a cigar rolled with $100 bills, it would say, "That's nothin'," with a Grinch-like grin on its face. It would be saying this because, after gaining 108% this year, it easily outperformed all its Dow peers.
Alas, if poor Hewlett-Packard (NYSE:HPQ) were a person, it would be weeping in a corner somewhere. Today, Mr. Market would bring it a tissue. "There, there," he would say. "Here's 4.2%. You can be the best stock in the Dow -- today." Blowing its nose, HP would briefly feel better. Then it would break down again, remembering its 44% stumble in 2012. The pending government investigation into HP's Autonomy acquisition would cause Mr. Market to have to "go to the bathroom," leaving HP alone to wallow in its self-pity.
Nutritional supplement maker Herbalife (NYSE:HLF), not invited to the Dow's holiday party, would instead throw one of its own. Supreme self-confidence, causing people to temporarily forget how much of a loser it was earlier this year, would convince some that it got a bad rap; the stock surged 12% today, closing down 35% for the year.
Later, someone will remember that Herbalife could be a pyramid scheme.
Wall Street remained bearish on Questcor Pharmaceuticals (UNKNOWN:QCOR.DL) today, which fell 0.8% to close 2012 down 34%. Questcor is reeling from a PR fallout after the company appeared on the front page of The New York Times Sunday Business section yesterday. The critical expose chewed out the company for a sudden, dramatic increase in the price of a drug called Acthar, which skyrocketed from $1,650 a vial to more than $23,000 in 2007. The Times also questioned the efficacy of Acthar and the level of research done by Questcor before bringing it to market.