US open: Stocks bounce back slightly on fiscal cliff optimism



LONDON (ShareCast) - - Some Republican Senators believe an agreement is possible
- An agreement in the Senate could come today
- Lawmakers in the House of Representatives set to convene at 18:00

Dow Jones Industrial: -0.06%
Nasdaq Comp.: 0.53%
S&P 500: 0.40%

The main market averages are registering a modest bounce in today´s holiday shortened session, on the back of rather heavy and optimistic market-chatter regarding the possibility of an agreement - at least in the Senate - that could allow the US to avoid much of the negative impact which going over the fiscal cliff might have on the economy. Nevertheless, it is not completely clear if that agreement will be reached tonight or in the next few days. Likewise, the possibility exists that it may just be a sort of 'mini-deal' instead.

Of particular note in that regard are the positive statements to be heard today from some Republican Senators, such as Jon Llewellyn Kyl (Arizona) or Borb Corker (Tennessee) as they enter the upper chamber of Congress for today´s meetings. The former has been cited as saying that a lot of progress has been made, although he is not sure that a pact can be reached tonight.

Senate Democrat minority leader Harry Reid (Nevada) on the other hand was a bit more measured in his optimism, describing talks between both sides as 'progressing.'

The House of Republicans is set to convene at 18:00.

Nevertheless, and as Nomura economist Lewis Alexander wrote this morning, any sort of 'mini-deal' would not solve three long standing problems: the need to extend payroll tax cuts, to avoid automatic spending cuts - known as "sequestration" - and to raise the debt limit (which needs to be done in the first quarter).

What would it achieve? It would avoid the elimination of the 'Bush-era' income tax cuts for most taxpayers (including those on capital gains and dividends) and extend unemployment benefits. That would soften the blow to the economy arising from the current stalemate on Capitol Hill and - hopefully - buy time for a more complete agreement.

Nevertheless, there are still some fears for the stock market when looking out to the early part of the new year. That after a 12% run higher in 2012 that was led by financials and retailers.

In any case, the main obstacle to any agreement seems to continue to be the Republicans in the lower chamber of Congress.

Optimists undaunted

The Standard & Poor's 500 Index will probably surpass its record high in 2013 as bears capitulate and the lure of a four-year bull market pulls "everyone in the pool," according to the former Salomon Brothers Inc. executive, Laszlo Birinyi, Bloomberg reports. The 69- year-old money manager says the bull market that began in March 2009 resembles advances that pushed equities up more than threefold in the 1980s and fourfold in the 1990s.

Carlyle Group and other investors agreed to buy investment- banking firm Duff & Phelps for $665.5m.

Private equity (Swiss: PEHN.SW - news) group Kohlberg Kravis Roberts was mulling a £1.8bn ($2.9bn) bid for Trader Media Group.

Cal-Maine Fooods unveiled a 39% drop in fiscal second-quarter earnings as higher feed costs hit the bottom line.

US regulators have approved Bristol-Myers Squibb´s blood thinner Eliquis for marketing.

The Federal Reserve Bank of Dallas´s manufacturing sector index for the month of December increased to 6.8 points (Consensus: -0.5), after a reading of -2.8 for the previous month.

Long-term yields edge higher
Yields on 10 year US Treasuries were rising by 3 basis points to the 1.73% mark.

Front month West Texas crude futures fell 0.43% to the 91.19 dollar mark on NYMEX.

S&P 500 - Risers
Cliffs Natural Resources Inc (NYSE: CLF - news) . (CLF) $37.10 +4.27%
Apple Inc (NasdaqGS: AAPL - news) . (AAPL) $526.50 +3.32%
Macy's Inc. (M) $38.54 +3.16%
Federated Investors Inc. (FII) $20.36 +2.62%
Netflix Inc (NasdaqGS: NFLX - news) . (NFLX) $91.46 +2.38%
Jabil Circuit Inc (NYSE: JBL - news) . (JBL) $19.01 +2.15%
Tesoro Corp. (TSO) $43.66 +2.13%
Advanced Micro Devices Inc (NYSE: AMD - news) . (AMD) $2.33 +2.13%
Peabody Energy Corp (NYSE: BTU - news) . (BTU) $25.86 +1.99%
Goodyear Tire & Rubber Co (NasdaqGS: GT - news) . (GT) $13.55 +1.96%

S&P 500 - Fallers
Watson Pharmaceuticals Inc (NYSE: WPI - news) . (WPI) $85.58 -3.89%
DeVry Inc (NYSE: DV - news) . (DV) $23.02 -1.71%
Apollo Group Inc (NasdaqGS: APOL - news) . (APOL) $20.18 -1.37%
R.R. Donnelley & Sons Co. (RRD) $8.79 -1.35%
Chesapeake Energy Corp. (CHK) $16.35 -1.27%
EQT Corp. (EQT) $57.42 -1.22%
Dun & Bradstreet Corp (NYSE: DNB - news) . (DNB (Other OTC: DNBHF - news) ) $77.62 -0.83%
Range Resources Corp. (RRC) $61.52 -0.81%
ConAgra Foods Inc (NYSE: CAG - news) . (CAG) $28.97 -0.80%
Northrop Grumman Corp. (NOC) $66.24 -0.78%

Dow Jones I.A - Risers
Caterpillar Inc (NYSE: CAT - news) . (CAT (Taiwan OTC: 4990.TWO - news) ) $87.94 +1.30%
General Electric Co. (GE) $20.69 +1.22%
Home Depot Inc. (HD) $61.28 +1.04%
Hewlett-Packard Co. (HPQ) $13.80 +0.84%
Intel Corp. (INTC) $20.34 +0.56%
Bank of America Corp. (BAC) $11.42 +0.53%
AT&T Inc. (T) $33.46 +0.43%
Exxon Mobil Corp. (XOM) $85.33 +0.27%
Procter & Gamble Co (NYSE: PG - news) . (PG) $67.31 +0.24%
3M Co. (MMM) $91.94 +0.17%

Dow Jones I.A - Fallers
Boeing Co (NYSE: BA - news) . (BA) $74.30 -0.52%
Coca-Cola Co. (KO) $35.78 -0.51%
McDonald's Corp. (MCD) $87.18 -0.46%
E.I. du Pont de Nemours and Co. (DD) $44.53 -0.39%
Unitedhealth Group Inc. (UNH) $53.68 -0.33%
Verizon Communications Inc. (VZ) $42.76 -0.33%
Travelers Company Inc. (TRV) $71.10 -0.20%
Microsoft Corp. (MSFT) $26.50 -0.17%
Wal-Mart Stores Inc. (WMT) $67.54 -0.11%
Walt Disney Co. (DIS) $49.10 -0.10%

Nasdaq 100 - Risers
Apple Inc. (AAPL) $526.50 +3.32%
Randgold Resources Ltd. Ads (GOLD) $98.57 +2.34%
Facebook Inc (NasdaqGS: FB - news) . (FB) $26.45 +2.08%
Western Digital Corp. (WDC) $42.19 +1.76%
Expedia Inc (NasdaqGS: EXPE - news) . (EXPE) $60.30 +1.58%
Amazon.Com Inc. (AMZN) $248.82 +1.49%
Sears Holdings Corp. (SHLD) $40.08 +1.47%
Intuitive Surgical Inc (NasdaqGS: ISRG - news) . (ISRG) $486.54 +1.47%
Liberty Interactive Corp (LINTA) $19.34 +1.36%
News Corp (NasdaqGS: NWS - news) . Class A (NWSA) $24.91 +1.22%

Nasdaq 100 - Fallers
Mondelez International Inc (NasdaqGS: MDLZ - news) . (MDLZ) $25.06 -0.79%
Intuit Inc (NasdaqGS: INTU - news) . (INTU) $59.02 -0.52%
Virgin Media Inc (NasdaqGS: VMED - news) . (VMED) $36.27 -0.38%
CA Inc. (CA) $21.71 -0.35%
DIRECTV (NasdaqGS: DTV - news) (DTV) $49.26 -0.32%
Express Scripts Holding Co (ESRX) $52.77 -0.30%
Altera Corp (NasdaqGS: ALTR - news) . (ALTR) $33.92 -0.26%
Microchip Technology Inc (NasdaqGS: MCHP - news) . (MCHP) $32.03 -0.25%
BMC Software Inc (NasdaqGS: BMC - news) . (BMC) $39.47 -0.23%
Microsoft Corp. (MSFT) $26.50 -0.17%