Stocks gain for second week, keeping S&P near high
Stocks are up on the year after lawmakers came up with a last-minute deal to prevent the U.S. from going over the "fiscal cliff." That averted the threat of a series of tax hikes and spending cuts Jan. 1 that economists say would almost certainly have pushed the U.S. economy into recession.
Avoiding the "cliff" will likely have boosted consumer confidence, said Chris Kichurchak, vice president at Strategic Wealth Partners. That improving sentiment, combined with a strengthening housing market, should prove favorable to so-called cyclical companies that move in line with the economy.
"There are a lot of people who were holding out on spending," before a budget deal was struck, said Kichurchak.
Investors started the year by jumping into stocks, according to Bank of America Merrill Lynch research. Just over $22 billion was invested in equities in the first full week of this year, the second-highest weekly in-flow on record after the $22.8 billion that was invested in September 2007.
The yield on the 10-year Treasury note, which moves opposite to the security's price, fell 4 basis points to 1.86 percent.
Other stocks making big moves;
— American Express rose 45 cents, or 0.7 percent, to $61.24 after the company said that spending by cardholders jumped 8 percent in the fourth quarter, even after Superstorm Sandy crimped some buying.
— Best Buy jumped $2, or 16.4 percent, to $14.21 after the struggling consumer electronics chain reported holiday sales. The company's U.S. performance was flat and, while this was a hair below the 0.3 percent increase that Best Buy reported in the prior-year period, it was an improvement over the past several quarters.
— Ford rose 17 cents, or 1.2 percent, to $14. The company said demand for new vehicles is accelerating in the U.S. Ford plans to hire 2,200 engineers, computer programmers and other white-collar workers this year. The automaker said Thursday it was raising its dividend.
— Corning fell 19 cents, or 1.5 percent, to $12.45 after Goldman Sachs removed cut its rating on the specialty glass manufacturer to "neutral" from "buy," saying that it expected first quarter sales to decline more than previously expected.
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