The major U.S. indices surged late Monday after President Barack Obama emerged to say that a deal to avoid the so-called fiscal cliff was close to fruition but not yet finalised. The Dow Jones Industrial Average added 1.28%, or 166 points, to 13,104. The blue-chip index gained 7.26% in 2012. The S&P 500 surged 1.69%, or 24 points, to 1426. The S&P gained 13.41% in 2012. The Nasdaq spiked 2%, or 59 points, to close the year above 3,000 points at 3019. The tech-heavy index gained 15.91% in 2012 to post the largest increase among the major U.S. equity indices.
President Barack Obama emerged after the closing bell on Friday to say that he had engaged in a "constructive discussion" with House and Senate leadership about preventing tax hikes on the middle class. "But if an agreement isn't reached in time between Sen. Reid and Sen. [Mitch] McConnell, then I will urge Sen. Reid to bring to the floor a basic package for an up-or-down vote," Obama said on Friday. The president said the basic package would include a plan to protect middle-class tax cuts, extend unemployment insurance and groundwork for deficit reduction.
The Dallas Federal Reserve manufacturing survey showed that Texas factory activity edged up in December to 2.7 from last month's 1.7, according to the Texas Manufacturing Outlook Survey. Gold for February delivery spiked
$19.90 to settle at $1,675.80 an ounce at the Comex division of the New York Mercantile Exchange, while February crude oil contracts increased $1.02 to close at $91.82 a barrel. The benchmark 10-year Treasury plummeted 17/32 to boost the yield to 1.761%. The bond market closed early for the holiday. The dollar bumped up 0.11%, according to the U.S. dollar index.
Scoop of the Day:
The air was filled with optimism in the early hours of New Year’s Day (US time), as the Senate reached a partial agreement that seems to have all but avoided the fiscal cliff. But the market appears to be thrown back into uncertainty when the Republicans in the House of Representatives slammed the deal for the lack of spending cuts. The bill passed by the Democratic-led Senate would raise income taxes on families earning more than $450,000 per year and limit the amount of deductions they can take to lower their tax bill. Time is of essence as the new Congress will be sworn-in this Thursday. If no agreement is reached, the whole process will have to start over again.
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