Stocks Edge Higher in Early Trading on Wall Street
Stocks rose modestly Monday on Wall Street. Investors were encouraged by signs of progress in talks to avoid the "fiscal cliff" of tax increases and government spending cuts set to take effect in two weeks and a prediction of steady economic growth next year.
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 was up 59 points at 13,194 as of 9:54 a.m. The Standard & Poor's 500 index climbed eight points to 1,421 and the Nasdaq composite index rose 14 points to 2,985.
Banks and technology stocks were among the best-performing stocks in the opening minutes.
In Washington, there appeared to be movement in long-stalled talks over tax increases and government spending cuts set to take effect Jan. 1, known as the "fiscal cliff."
House Speaker John Boehner, a Republican, offered $1 trillion in higher tax revenue over 10 years and an increase on the top marginal income tax rate for people making $1 million per year, to 39.6 percent from 35 percent.
If congressional Republicans and the White House can't reach a deal by Jan. 1, tax cuts enacted a decade ago for all Americans will expire, and government programs will be cut across the board. The combination could lead to a recession.
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."
He suggested in a note to clients that the markets will not have "priced in" any outcome, "setting the stage for a market rally with an agreement and a slump with stalemate."
Clearwire slid 12 percent, or 41 cents, to $2.96 after Sprint announced terms of its buyout deal for the wireless Internet access company. Sprint's price of $2.97 per share was below Clearwire's closing stock price Friday.
A survey of top business economists released Monday by the National Association for Business Economics found that most expected modest economic growth in 2013, led by rising demand for housing.
Later this week, investors will get data on housing starts and existing home sales, plus a final read from the government on economic growth from July through September.
Personal income and spending figures out Friday could offer a read on consumer spending behavior at the start of the holiday shopping season, Kelly wrote to clients.