Overnight Markets: Wall Street jumps on "cliff" deal hopes

Wall Street surged on the last day of the year by the most since 1974, with the Standard & Poor's 500 Index registering a gain of 13.4% in 2012, as lawmakers in Washington moved closer to a resolution to the "fiscal cliff" negotiations.

The Dow Jones industrial average gained 166 points, or 1.28%, to end at 13,104. The Standard & Poor's 500 Index gained 24 points, or 1.69%, to finish at 1,426. The Nasdaq Composite Index gained 59 points, or 2%, to close at 3,020. The Dow rose 7.3% in 2012 and the Nasdaq climbed 15.9%.

Stocks oscillated yesterday on the headlines out of Washington, as both President Barack Obama and Republican Senate leader Mitch McConnell issued statements signalling a deal to avert the cliff was close.

Sources said an emerging deal, if adopted by Congress and President Obama, would raise $600 billion in revenue over the next 10 years by increasing tax rates for individuals making more than $400,000 and households earning above $450,000 annually.

Financials were the strongest gainer this year, led by Bank of America shares, which more than doubled. However, defensively oriented utilities ended the year lower, falling 2.9%.

Yesterday, Apple Inc shares rose 4.4%, helping lift the information technology sector and the Nasdaq. For the year, Apple gained 31.4%, ending with a market value of about $501.4 billion.

Facebook Inc. climbed 2.7% after Bank of Montreal raised its rating on the company to outperform from underperform.

Hewlett-Packard gained 4.2% for the biggest gain in the Dow. Caterpillar jumped 3.2%, while General Electric Co. advanced 2.7%.