November 17, 2012 in City

Stocks gain on hopeful fiscal talk

Kate Gibson MarketWatch
 

NEW YORK - U.S. stocks climbed Friday, denting weekly losses, as optimistic words followed the opening round of negotiations on averting automatic spending cuts and tax increases set to begin Jan. 1.

Halting a four-session losing run, the Dow Jones industrial average added 45.93 points, or 0.4 percent, to 12,588.31.

The S&P 500 index rose 6.55 points, or 0.5 percent, to 1,359.88.

The Nasdaq composite advanced 16.19 points, or 0.6 percent, to 2,853.13.

The price of oil climbed on fears of supply disruption caused by intensified fighting in the Middle East. Crude futures for December delivery rose $1.22, or 1.4 percent, to $86.67 a barrel on the New York Mercantile Exchange.

Ahead of Friday’s opening bell, stock-index futures had gained after a Wall Street Journal report that the White House is in discussions to replace spending reductions in the “fiscal cliff” with a smaller package of cuts and tax increases.

After meeting with President Barack Obama on Friday, House Speaker John Boehner, R-Ohio, and Senate Majority Leader Harry Reid, D-Nev., voiced optimism that they have a framework for a deal and they viewed the meeting as constructive

“It’s a distinct positive that they came out and said, ‘We talked; we saw some common ground.’ It’s not in either party’s interests to go over the cliff,” said Jim Dunigan, managing executive for investments at PNC Wealth Management.

House Minority Leader Nancy Pelosi, D-Calif., said there should be a goal to avert the cliff by Christmas, while Senate Minority Leader Mitch McConnell, R-Ky., and Boehner both said Republicans were willing to put revenue on the table to reach a deal.

“The challenge of this process is you’re held hostage to the headlines, every time someone mutters something in front of the cameras. Today we got a ray of sunshine, but that could change with the next comment,” said PNC’s Dunigan.

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