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Overnight Markets: US stocks gain on budget deal optimism
Better-than-forecast housing data and strong earnings from Lowe's and Tyson Foods also contributed to the market's advance.
Wall Street advanced on Monday in response to better-than-forecast housing data and a positive atmosphere surrounding talks to tackle the U.S.’s fiscal crunch.
The Dow Jones industrial average gained 208 points, or 1.65%, at 12,796. The Standard & Poor's 500 Index was up 27 points, or 1.99%, at 1,387. The Nasdaq Composite Index was up 63 points, or 2.21%, at 2,916.
Shares advanced as policymakers expressed confidence that a deal could be reached to stave off the looming "fiscal cliff," a raft of tax and spending changes that will begin to take effect next year.
“I am confident we can get our fiscal situation dealt with,” U.S. President Barack Obama said yesterday at a news conference in Bangkok, where he began a three-nation Asian trip. Obama met with senior Democrats and Republicans on 16 November for talks to avoid the situation.
Sentiment was boosted further after housing data showed sales of previously owned U.S. homes surged in October and confidence among U.S. homebuilders unexpectedly climbed in November to a six-year high. Home Depot Inc., the biggest U.S. home-improvement retailer, gained 2%.
Stronger-than-expected earnings from Lowe's Cos Inc and Tyson Foods Inc also contributed to the market's advance. Shares of Lowe's jumped 6.2%. Tyson Foods added 10.9%.
Elsewhere, Intel shares edged higher, up 0.3% after the company said its chief executive will retire in May.
Resource companies also gained after commodities prices surged. Freeport-McMoRan rose 4.1%, while U.S. Steel rose 5.3%. Newmont Mining added 1.5%, while Occidental Petroleum Corp. gained 2.2%.
In deal news, Cisco Systems Inc. increased 1.7% as it agreed to buy closely held Meraki Inc. for $1.2 billion.
In Asia, shares gained on Tuesday as strong U.S. home sales boosted optimism in the world’s largest economy.
The MSCI Asia Pacific Index gained 0.4% to 122 as of 11:31 a.m. in Tokyo. Japan’s Nikkei 225 Stock Average rose 0.1%. The Bank of Japan is unlikely to take any action today at the end of its two-day policy meeting. Australia’s S&P/ASX 200 Index gained 0.5%. South Korea’s Kospi Index climbed 0.6%. Hong Kong’s Hang Seng Index advanced 0.9%, while China’s Shanghai Composite Index added 0.1%.
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