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At midday: S&P 500 jumps on ‘fiscal cliff’ hopes

Mika Makelainen/iStockphoto

North American stocks were mixed in midday trading on Monday: U.S. stocks rose on signs of progress in budget negotiations while Canadian stocks retreated.

Shortly after noon, the S&P 500 was up 13 points or 0.9 per cent, to 1426. The blue-chip Dow Jones industrial average was up 86 points or 0.7 per cent, to 13,221. In Canada, the S&P/TSX composite index was down 21 points or 0.2 per cent, to 12,276.

The gains in the United States seemed largely tied to easing concerns about the so-called "fiscal cliff" of automatic tax increases and spending cuts in the New Year should Republicans and Democrats fail to reach an agreement on the budget. Now, House Speaker John Boehner has signalled a willingness to allow tax increases on millionaires, suggesting that Republicans might be backing down from an earlier intransigence.

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However, the economic backdrop wasn't supportive: A survey of New York-region manufacturing activity fell more than expected.

Within the S&P 500, financials led the gains, rising 1.6 per cent. Consumer discretionary stocks rose 1.3 per cent and technology stocks rose 1.1 per cent.

Apple Inc. which had dipped close to the $500 (U.S.) mark soon after trading began following target price cuts by Citigroup and Canaccord Genuity, rebounded soon after. In midday trading it was up 1.2 per cent, to $516.

Within Canada's benchmark index, materials fell 0.7 per cent, financials fell 0.3 per cent and energy stocks were unchanged.

Sun Life Financial Inc. fell 2.1 per cent after it announced a deal to sell its U.S. annuity business to Delaware Life Holdings for $1.35-billion. The deal is marked as an attempt by Sun Life to reduce its risk profile and earnings volatility.

In Europe, the U.K.'s FTSE 100 fell 0.2 per cent and Germany's DAX index rose 0.1 per cent.

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About the Author
Investing Reporter

David Berman has been writing about business and investing since 1995. He has written for a number of magazines, including Canadian Business and MoneySense. He worked at the Financial Post as an investing writer and daily columnist before moving to the Globe and Mail in 2008. More

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