NEW YORK (AP) — Stocks rose on Wall Street as investors were encouraged by signs of progress in budget talks in Washington. Just two weeks remain before tax increases and government spending cuts take effect if no deal is reached.
On the floor of the New York Stock Exchange, stock traders paused for a minute of silence at 9:15 a.m. EST to remember the 20 children and seven adults killed Friday in a gunman’s rampage through a Connecticut elementary school.
The Dow Jones industrial average rose 100.38 points to 13,235.39, its biggest gain this month. The Standard & Poor’s 500 index climbed 16.78 points to 1,430.36 and the Nasdaq composite index rose 39.27 points to 3,010.60.
Marc Chaikin, CEO of the Philadelphia-based market research firm Chaikin Analytics, said investors became more hopeful for a resolution in the budget talks after House Speaker John Boehner made an offer to increase tax rates on high-income Americans.
“The fiscal cliff is obviously foremost on everyone’s mind,” Chaikin said.
Banks were among the best-performing stocks. Citigroup gained $1.55, 4.1 percent, to $39.15 after Raymond James raised its target price on the stock to $52 from $44. In a note to clients, the brokerage reaffirmed its “Strong Buy” rating, citing the “improving fundamental outlook.” Bank of America also gained 42 cents, or 4 percent, to $11.
Investors are currently favoring financial stocks over technology stocks, said Ben Schwarz, chief market strategist at Lightspeed Financial.
“The banks are ripping today,” Schwarz said. “People are looking for stability and the tech sector hasn’t given them any.”
Financial companies make up the best performing industry group in the S&P 500 this year, according to FactSet data. The group, which includes banks such as Wells Fargo & Co. and insurers such as Travelers, has gained 25 percent this year.
Apple rose $9.04, or 1.8 percent, to $518.83 after the company said it sold more than 2 million iPhone 5s in China in their first three days of availability, setting a record for that market. The technology giant’s stock has fallen 26 percent since it closed at a record $702.10 in September and is trading close to its lowest since February.
In Washington, there appeared to be movement in long-stalled budget talks aimed at avoiding tax increases and government spending cuts set to take effect Jan. 1, which are known as the fiscal cliff. The combination could lead to a recession.
Indexes opened higher following the news that Boehner, a Republican, offered $1 trillion in higher tax revenue over 10 years and an increase on the top tax rate for people making $1 million per year, to 39.6 percent from 35 percent. The market moved higher still after news crossed shortly before noon that Boehner went to the White House to meet with President Barack Obama.
Wall Street has been relatively calm in recent weeks, but David Kelly, chief global strategist for J.P. Morgan Funds, said that by Friday the market will be “squarely focused on what is or is not happening in Washington.”