U.S. stocks rose, erasing an earlier loss for the Standard & Poor’s 500 Index, after comments by Speaker of the House John Boehner and President Barack Obama fueled optimism an agreement can be reached in budget talks.
The S&P 500 climbed 0.8 percent to 1,409.93 in New York, after erasing a decline of as much as 1 percent. The Dow Jones Industrial Average added 106.98 points, or 0.8 percent, to 12,985.11 today. About 6.1 billion shares traded hands on U.S. exchanges today, in line with the three-month average, according to data compiled by Bloomberg.
Obama “was confident of something being done by the end of the year,” Thomas Garcia, head of equity trading at Santa Fe, New Mexico-based Thornburg Investment Management Inc., said in an e-mail. His firm oversees about $80 billion. “This is something that the market is worried about not getting done by year-end, so if they can get it done, it would provide some relief. The market doesn’t like uncertainty.”
Equities reversed declines as Boehner, an Ohio Republican, said he is optimistic lawmakers engaged in budget talks can “avert this crisis sooner rather than later.” He made his remarks to reporters, while saying he continues to oppose the expiration of tax cuts for top earners and Democrats need to get “serious” on budget cuts. Obama said separately at the White House, “My hope is to get this done before Christmas.”
Stocks fell earlier after Erskine Bowles, co-chairman of Obama’s 2010 fiscal commission, said it’s unlikely the president and Congress will reach a deal by the end of this year. The president met with business leaders today, including Goldman Sachs Group Inc. Chief Executive Officer Lloyd Blankfein.
The S&P 500 has declined 1.3 percent since Obama was re- elected on Nov. 6 as he seeks a budget agreement with the Republican-controlled House. The deal is aimed at avoiding $607 billion of automatic tax increases and spending cuts that come into effect next year.
Sales of new U.S. homes dropped 0.3 percent to a 368,000 annual pace following a revised 369,000 rate in September that was weaker than initially reported, figures from the Commerce Department showed today in Washington. The median estimate of 74 economists surveyed by Bloomberg called for a 390,000 sales pace.
Via – Bloomberg