Market rises on cliff-deal optimism

Posted: December 06, 2012

NEW YORK - Stocks closed higher Wednesday, their first gain of the week, as bank shares rose and comments from President Obama made investors optimistic that a quick deal could be made to avoid the fiscal cliff.

The Dow Jones industrial average rose 82.71 points to end at 13,034.49. It had been up as much as 137. The Standard & Poor's 500 closed up 2.23 points at 1,409.28. The Nasdaq composite was down 22.99 points to 2,973.70, held back by a slump in Apple.

Citigroup jumped $2.17, or 6.3 percent, to $36.46 after the bank said it planned to eliminate more than 11,000 jobs, about 4 percent of its workforce, to cut expenses and improve efficiency. Travelers surged $3.47, or 4.9 percent, to $74 after it announced plans to resume stock buybacks. Travelers temporarily suspended repurchases after Hurricane Sandy while it assessed its exposure to damage claims.

Apple was among the decliners, falling $37.05, or 6.4 percent, to $538.79. Stifel Financial analyst Aaron Rakers said the drop was in part due to comments from AT&T Mobility chief executive officer Ralph de La Vega that suggested smartphone activations this quarter were lagging behind the same period a year ago. The stock has now dropped 23 percent since closing at a record $702.10 in September.

Stocks were still up for the year, after the Federal Reserve extended its bond-buying program in September, offsetting concern that the European debt crisis was set to spread. The Dow has gained 7 percent and S&P 500 has advanced 12 percent.

A Chinese government pledge to maintain policies intended to strengthen the world's second-largest economy helped raise optimism about global growth. China's Shanghai Composite Index jumped 2.9 percent to 2,031.91. Hong Kong's Hang Seng ended 2.2 percent higher at 22,270.91.

A private survey showed Wednesday that U.S. businesses added fewer workers in November, in part because Sandy shut down factories, retail stores, and other companies. Payroll processor ADP said employers added 118,000 jobs last month. That's below October's total of 157,000, which was revised lower. Investors will also look to the monthly jobs report from the Labor Department on Friday for more information about how the economy is doing.

Orders to U.S. factories rose modestly in October, helped by a big gain in demand for equipment that reflects business investment plans. Factory orders edged up 0.8 percent in October, the Commerce Department said Wednesday. That followed a 4.5 percent jump in September.

The yield on the 10-year Treasury note fell 1 basis point to 1.59 percent.

Among other stocks making big moves:

Freeport-McMoRan Copper & Gold plunged $6.12, or 16 percent, to $32.16 after the mining company said it was buying oil companies Plains Exploration & Production and McMoRan Exploration for about $9 billion.

Mattress Firm Holding Corp. fell $6.65, or 22 percent, to $23.67 after the mattress retailer said late Tuesday sales trends were softening.

Pandora Media, an Internet radio company, fell $1.65, or 17.5 percent, to $7.80 after saying it would take a much larger loss in the fourth quarter than analysts had been forecasting.

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