The markets sure know how to ring in the new year! At roughly halfway through the trading session, the Dow Jones Industrial Average is up 220 points, or 1.68%. The reason? Politicians finally got their you-know-what together and passed a package averting the dreaded fiscal cliff.
As everybody and their mother now knows, policymakers in Washington had until Jan. 1 to stymie the impact of draconian spending cuts and tax increases that had been put in place by various pieces of legislation throughout the years. While it came down to the wire, with the House of Representatives voting on the measure late last night, a deal was sealed, which blocked tax increases on all but the wealthiest Americans and postponed the most pernicious spending cuts.
In the wake of the news, financial stocks are among the Dow's biggest winners, with Bank of America , JPMorgan Chase, and American Express up 3.1%, 1.9%, and 2.3%, respectively. While B of A was the best-performing stock on the blue chip index in 2012, many are predicting that it still has room to grow. Yesterday, an article in The Wall Street Journal suggested that the nation's second-largest bank by assets is now in a position to buy back Warren Buffett's $5 billion investment in preferred shares. And today, Evercore Partners reiterated its bullish stance on the bank by selecting B of A as its top pick among large-cap banks in 2013.
Also making news today are shares of Zipcar , up nearly 50% since open. This morning it was announced that Avis Budget Group has agreed to acquire the popular car-sharing company for $12.25 per share, a 49% premium to the stock's closing price on Monday. The move comes in the middle of a larger wave of consolidation in the rental car industry. Last year, for example, Avis lost an extended bidding war for Dollar Thrifty Automotive Group to Hertz Global Holdings.
Finally, Target is among the few decliners today -- down 1.5% in intraday trading. An analyst at investment bank Jefferies & Co. cut Target to a hold from a buy this morning and reduced its price target on the retail giant to $59 from $74, citing potentially disappointing holiday sales and lower same-store sales figures.
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The article Why the Dow Is Surging More Than 200 Points originally appeared on Fool.com.John Maxfield owns shares of Bank of America. The Motley Fool owns shares of Bank of America, Hertz Global Holdings, JPMorgan Chase & Co., and Zipcar. Motley Fool newsletter services recommend American Express Company and Zipcar. Try any of our Foolish newsletter services free for 30 days. We Fools may not 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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