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Overnight Markets: U.S. stocks jump on positive fiscal cliff talks

Overnight Markets: U.S. stocks jump on positive fiscal cliff talks

Wall Street rallied on Wednesday after comments from Speaker of the House John Boehner and President Barack Obama on a possible compromise to avoid the fiscal cliff fuelled optimism in the market.

The Dow Jones industrial average jumped 107 points, or 0.83%, to 12,985 at the close. The S&P 500 gained 11 points, or 0.79%, to 1,410. The Nasdaq Composite added 24 points, or 0.81%, to close at 2,992.

Shares gained after Boehner, an Ohio Republican, said he was optimistic that a budget deal to avoid fiscal cliff can be worked out. Adding to the positive sentiment, President Obama said he hoped to get a deal done in the next four weeks.

The comments overshadowed weaker economic news, including the Federal Reserve’s  Beige Book survey that said the U.S. economy expanded at a “measured pace” in recent weeks due to a slowdown in manufacturing and the impact of superstorm Sandy.

Separately, sales of new U.S. homes dropped 0.3% to a 368,000 annual pace following a revised 369,000 rate in September that was weaker than initially reported, the Commerce Department said.

Costco Wholesale Corp, up 6.3%, was the S&P 500's biggest percentage gainer after it became the latest company to announce a special dividend.

In deal news, Knight Capital Group Inc shares jumped 15.2% on news that Getco Holding proposed a $1.4 billion merger with Knight, while Virtu Financial offered to buy Knight for at least $1.1 billion.

Apparel retailer Express Inc added 8.9% after it forecast strong earnings for the current quarter as lower prices and easy-to-understand discounts led to robust Black Friday sales.

Green Mountain Coffee Roasters surged 27.3% a day after it forecast quarterly and full-year earnings well ahead of analysts' expectations.

J.C. Penney Co. rallied 4.6% as consumer staples and discretionary stocks posted gains.

In Asia, shares rose on Thursday in morning trade after the leader of Japan’s opposition party called for unlimited monetary policy easing and U.S. lawmakers said they’re optimistic for an agreement to avoid automatic spending cuts and tax increases.

The MSCI Asia Pacific Index gained 0.5% to 124 as of 11:21 a.m. in Tokyo.  Japan’s Nikkei 225 Stock Average gained 0.7%, while the broader Topix Index rose 0.8%. Hong Kong’s Hang Seng Index rose 0.5 percent and the Shanghai Composite Index was little changed. South Korea’s Kospi Index advanced 0.9%, Singapore’s Straits Times Index rose 0.6% and Taiwan’s Taiex gained 0.9%.

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