Last night's resolution of the fiscal cliff -- or at least the portion dealing with tax rates -- sent stocks soaring. Investors breathed a sigh of relief after Congress managed to agree to continued low tax rates for the vast majority of taxpayers. In particular, with maximum rates on dividends rising only to 20% and only for those with incomes above $400,000 (or $450,000 for joint filers), stock investors got most of what they wanted from the deal. The Dow Jones Industrials (DJINDICES:^DJI) led the broader market higher with a gain of 244 points as of 3:30 p.m. EST.
One of the more interesting aspects about today is that both 2012's best-performing Dow component and its worst performer posted outsized gains. The Dow's biggest gainer was Hewlett-Packard (NYSE:HPQ), which closed 2012 with a 43% loss. Today's 5% jump doesn't put much of a dent in last year's decline, but with the company saying in a recent filing with the SEC that it is considering selling off underperforming businesses, investors seem optimistic that CEO Meg Whitman is starting to assert control over the long-struggling business.
On the other side of the coin, Bank of America (NYSE:BAC) rose by 3% after more than doubling in 2012. At least one analyst still thinks the soaring stock has more room to run, as Evercore put the bank on its "conviction buy" list as its pick among large-cap banks. Even after its huge gains, B of A is still down by three-quarters from its early 2008 levels, suggesting that a further rebound is possible.
Home Depot (NYSE:HD) followed up on last year's 50% gain with a 2% rise. A fiscal-cliff compromise should support economic activity generally and housing specifically, although some worry that the end of payroll tax reductions could sap low- and middle-income households and hurt retailers that aim at lower-end shoppers. That demographic isn't Home Depot's true focus, though, so a modest gain makes sense.
Finally, Intel (NASDAQ:INTC) rose almost 3%, recouping a chunk of its 12% 2012 loss. Joining the elite ranks of top-yielding Dow stocks, Intel has become almost as much an income stock as a growth company, but its aspirations to get deeper into the mobile world won't fade anytime soon. Intel isn't alone in facing the challenges of PC obsolescence, but if talk of the death of PCs proves premature, then Intel stands to gain the most from its beaten-down state.
Fool contributor Dan Caplinger has no positions in the stocks mentioned above. You can follow him on Twitter @DanCaplinger. The Motley Fool owns shares of Bank of America and Intel. Motley Fool newsletter services recommend Home Depot and Intel. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.