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Overnight Markets: U.S. stocks gain amid optimism over budget

Optimism lawmakers will reach a budget agreement before the year-end overshadowed Apple’s worst day of losses in almost four years.

 
Overnight Markets: U.S. stocks gain amid optimism over budget

Wall Street gained on Wednesday, snapping a two-day slump, as optimism lawmakers will reach a budget agreement before the year-end overshadowed Apple’s worst day of losses in almost four years.

The Dow Jones industrial average rose 83 points, or 0.64%, to 13,034 at the close. The Standard & Poor's 500 Index gained two points, or 0.16%, to 1,409. But the Nasdaq Composite Index fell 23 points, or 0.77%, to end at 2,974.

The market oscillated in the early hours but rebounded later after President Barack Obama said that a fiscal cliff deal was possible "in about a week" if Republicans acknowledged the need to raise taxes on the wealthiest Americans.

Sentiment was boosted further after economic data showed orders for equipment such as computers and electrical gear climbed in October by the most in eight months, indicating U.S. manufacturing is stabilising. Service industries in the U.S. unexpectedly grew at a faster pace in November.

Apple, the largest U.S. company by market capitalisation and a big weight in both the S&P 500 and the Nasdaq, plunged 6.4% on concern about Nokia Oyj getting a leg up in China and traders betting that a recent rally may have sputtered. Strangely, the decline accounted for the entirety of the Nasdaq 100's fall of 1.1%. Apple shed nearly $35 billion in market capitalisation, its biggest one-day market-cap loss ever.

Shares of The Travelers Cos Inc jumped 4.9% after the insurance company said it intended to resume stock buybacks it had temporarily suspended while it assessed its exposure to Superstorm Sandy.

Citigroup led banking shares higher with a 6.3% jump after the company said it would cut 4% of its workforce. Bank of America ended up 5.7% for the day.

Cyclical sectors rallied on optimism about progress on a solution to avoid the fiscal cliff. Caterpillar Inc added 2.2%.

Freeport-McMoRan Copper & Gold Inc fell 16% after the company said it was acquiring Plains Exploration & Production Co and McMoRan Exploration Co in two separate deals for $9 billion.  McMoRan Exploration soared 87% and Plains surged 23.4%.

In Asia, shares climbed on Thursday after data on U.S. services and factory orders beat estimates.

The MSCI Asia Pacific Index gained 0.3% to 126 as of 11:53 a.m. in Tokyo. Japan’s Nikkei 225 Stock Average increased 0.8% after the yen traded near a seven-month low. South Korea’s Kospi Index added 0.4%. Hong Kong’s Hang Seng Index was little changed, while China’s Shanghai Composite Index slipped 0.3%. Australia’s S&P/ASX 200 Index lost 0.1%.

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