US stocks soar on ‘cliff’ hopes, housing data

Traders work on the floor of the New York Stock Exchange November 7, 2012 in New York City. AFP FILE PHOTO

NEW YORK—US stocks surged Monday on upbeat housing data and hopes that politicians will find a way to avoid the so-called “fiscal cliff” of automatic tax hikes and spending cuts in January.

The jump was underpinned by Apple, the most valuable public company, which took a 7.2 percent bounce to $565.73, following weeks of losses.

The Dow Jones Industrial Average gained a hefty 207.65 points (1.65 percent) at 12,795.96.

The S&P 500-stock index advanced 27.01 points (1.99 percent) to 1,386.89, while the tech-rich Nasdaq Composite leaped 62.94 (2.21 percent) to 2,916.07.

“In the wake of a couple of stronger-than-expected reports on the US housing sector, as well as growing optimism that US lawmakers will find a resolution to the looming fiscal cliff, the domestic equity markets are rebounding nicely from their recent sell-off,” Charles Schwab & Co. analysts said.

The strong rally began a holiday-shortened week amid news that existing home sales rose 2.1 percent in October from September and home builder confidence improved for a seventh straight month in November.

“The housing data revealed today are quite positive, reflecting the sustained recovery in the housing market that began earlier this year,” said Nomura economist Roiana Reid.

Dow member Intel rose 0.3 percent after announcing that chief executive Paul Otellini would retire in May.

Computer networking giant Cisco, which is buying cloud computing specialist Meraki for $1.2 billion, gained 1.7 percent.

Lowe’s jumped 6.2 percent after the home improvement retailer posted better-than-expected third-quarter results.

Bank of America added 4.1 percent after an upgrade by Stifel analysts, lifting financials. Citigroup added 3.2 percent, Goldman Sachs 2.1 percent and Morgan Stanley 2.1 percent.

JPMorgan Chase climbed 2.7 percent. The bank said Monday it had agreed to pay $297 million to the US Securities and Exchange Commission to settle a dispute over the sale of mortgage-backed securities.

Markets will be closed Thursday for the Thanksgiving Day holiday and have shortened sessions on Friday.

Bond prices fell. The 10-year US Treasury yield rose to 1.61 percent from 1.57 percent late Friday, while the 30-year increased to 2.76 percent from 2.72 percent.

Bond prices and yields move inversely.