Fiscal Cliff Hopes Spur the Dow's Gains
Dec 31st 2012 2:30PM
Updated Dec 31st 2012 2:38PM
We're on the final day of Fiscal Cliff Watch before America careens straight off the edge, but small flickers of hope surrounding a potential deal have the Dow Jones Industrial Average up on the final day of 2012. As of 2:05 p.m., ET the Dow's risen to gains of 40 points, or 0.3%. Stocks are mostly in the green, and several big winners are keeping the Dow in positive territory to welcome in the new year.
Dealing at the deadline
Traces of a solution began to form today, as it was reported that politicians could be coming around to a deal involving tax increases for personal incomes above $450,000 annually. With no word on what to do surrounding budget cuts, however, it's still doubtful that a meaningful solution to the fiscal cliff will be solved on the last day before cuts and tax increases come into effect tomorrow.
That didn't stop the Dow from turning upward on the news. Industrial giant Caterpillar , as one of the more vulnerable Dow members to the fiscal cliff's potential damaging effects on the economy, has embraced the deal talks in gaining 2.3% today. Although Caterpillar's seen shares fall more than 7% over the course of 2012, a potential recession in the first few quarters of 2013 -- brought about by the fiscal cliff -- certainly wouldn't help turn the stock around. Fellow manufacturer Alcoa has also seen shares rise to the tune of 1.1% gains.
Hewlett-Packard has also managed to post gains near the top of the Dow leader board, as shares have risen 2.2%. Don't be fooled by the optimism, however -- HP's still facing trouble surrounding its Autonomy deal and subsequent writedown, which the Department of Justice is now preparing to investigate. With the PC market in decline, the future looks grim for this beleaguered tech giant. For the year, shares of HP have plummeted in excess of 48%.
Among top risers, Bank of America and General Electric , two further stocks that could benefit from avoiding the fiscal cliff, are posting gains of 1.3% apiece.
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The article Fiscal Cliff Hopes Spur the Dow's Gains originally appeared on Fool.com.Dan Carroll has no positions in the stocks mentioned above. The Motley Fool owns shares of Bank of America and General Electric. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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