Regarding the pact, President Barack Obama has said he will sign into law the legislation that sets up another fiscal-cliff type standoff in coming weeks, as the deal focused on raising revenue but bypassed spending reductions to address the U.S. deficit.
For the day, the Dow ended higher by 308.41 points (2.35%) at 13,412.55. Nasdaq ended higher by 92.75 points (3.1%) at 3,112.26. S&P 500 ended higher by 36.23 points (2.54%) at 1,462.42.
All ten economic sectors ended higher for the day led by the telecom sector. All thirty Dow components ended higher led by Caterpillar and H-P.
For the year 2012, the Dow, Nasdaq and S&P 500 rose 7.3%, 16% and 13% respectively.
Many markets worldwide, including Asian, European and U.S. stocks were cheered by U.S. lawmakers coming to agreement on the fiscal cliff matter that had been overhanging the market place for weeks. U.S. lawmakers had to reach a deal to avoid a series of tax increases and spending cuts that would have automatically gone into effect this week.
The U.S. fiscal cliff agreement overshadowed some fresh, dour economic news coming out of the European Union overnight. The Euro zone manufacturing PMI fell to 46.1 in December from 46.2 in November, according to the Markit data company. Any reading below 50.00 shows contraction. However, look for the market place to now focus more on the European Union and its sovereign debt crisis, now that the U.S. fiscal cliff matter has been temporarily resolved.
In the currency market, the dollar index, the U.S. dollar index was firmer on Wednesday afternoon after being under pressure early on.
Among economic data expected for the day at Wall Street, the December ISM Index was reported at 50.7 from 49.5% the month before while the consensus expected the reading to come in at 50.5. Separately, November construction spending decreased by 0.3% month-over-month, against the expected increase of 0.5%.
Despite the market-wide rally, retailers lagged ahead of tomorrow's December same store sales reports. Early indications have suggested consumers showed more caution with regards to their spending habits during the recent holiday season.
In M&A news, Zipcar soared 47.8% after the company agreed to be acquired by Avis Budget Group for $12.25 per share. The total transaction value is estimated at $500 million and the purchase price represents a 49.0% premium to Zipcar's December 31 close. Following the acquisition announcement, Avis reaffirmed its full-year 2012 earnings and revenue guidance.
Bullion metals at Comex finished higher on Wednesday, 02 January 2013, the first
trading day of the year. Gold prices hit a fresh two-week high on Wednesday, in the wake of an agreement by U.S. lawmakers overnight that avoided the dreaded fiscal cliff. Gains for silver were even bigger. Gold for February delivery rose $13 (0.8%) to settle at $1,688.8 an ounce on the Comex division of the New York Mercantile Exchange on Wednesday. Prices rose to a high of $1,695.4 during intra day trading. March silver rose $0.78, or 2.6% to settle at $31.01 an ounce.
Crude oil prices ended more than 1% higher on Wednesday, 02 January 2013 at Nymex. On Wednesday, light and sweet crude oil futures for light sweet crude for February delivery closed higher by $1.3 (1.4%) at $93.12/barrel
For every stock that fell more than 10 gained on the New York Stock Exchange, where 859 million shares traded. Composite volume neared 4.2 billion.
Indian ADRs ended mostly higher on Monday. In the Banking space, ICICI Bank was up 4.3% and HDFC Bank rose 1.1%. In the IT space, Infosys was up 1.3% and Wipro was up 2.2%. In the Telecom space, MTNL was unchanged and Tata Communication was up 2.4%. In the other space, Sterlite was up 4.53%, Tata Motors was up 3.5%. Dr Reddys was up 2.7%.
For tomorrow, in terms of economic data, the weekly MBA Mortgage Index and December Challenger Job Cuts will be reported at 7:00 ET and 7:30 ET respectively. December ADP Employment Change will be released at 8:15 ET. Weekly initial and continuing claims will be announced at 8:30 ET and the Federal Reserve will release the minutes from its December 12 policy meeting at 14:00 ET. Lastly, automakers will be reporting their sales throughout the day.
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