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

by Himanshu Singh on Nov 29, 2012 at 03:47

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.

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