U.S. stocks posted a nice start to the week with a broad rally amid positivity on the latest movements by House Republicans to avert the ever-nearer fiscal cliff scenario of tax hikes and spending cuts.
House Speaker John Boehner offered to raise tax rates on those making at least $1 million in exchange for $1 trillion in spending cuts. While the White House didn’t immediately go for the idea, it was at least considered to be “progress.”
All the major indices moved ahead, with the Nasdaq finishing up 1.32% to 3,101.60, the S&P 500 gaining 1.19% to 1,430.36 and the Dow Jones Industrial Average climbing 0.76% to end at 13,235.39.
Big banks were among the best performers, with Bank of America (NYSE:BAC) leading the Dow with a move of nearly 4% on the day. Citigroup (NYSE:C, +4.1%), Wells Fargo (NYSE:WFC +3.7%) and Goldman Sachs (NYSE:GS, +3.5%) all joined in on the financial rally.
Citigroup also made news by lowering its rating on Apple (NASDAQ:AAPL) from “buy” to “neutral” only 20 days after initiating coverage. AAPL shares dipped below $500 in the morning before rallying up just under 2% by the end of the day.
Meanwhile, the housing sector also saw big moves north. Home Depot (NYSE:HD) was the second-best gainer on the Dow with a move up of just more than 2%, while PulteGroup (NYSE:PHM, +5.3%) and D.R. Horton (NYSE:DHI, +5.1%) led the S&P 500.
Sprint (NYSE:S) sweetened its deal to buy Clearwire (NASDAQ:CLWR) for $2.2 billion after making an offer last week, dropping CLWR shares 14% on the day while Sprint stock moved up fractionally.
Hewlett-Packard (NYSE:HPQ) fell off its own cliff by dropping more than 3% as financial analysts speculated about whether the company should split up to enhance shareholder value. Shares had gained more than 10% in the past month of trading.
Finally, shares of Smith & Wesson (NASDAQ:SWHC) fell more than 5% amid speculation the U.S. government will impose stricter gun laws in the wake of a mass shooting in Connecticut. Competitor Sturm, Ruger (NYSE:RGR) and hunting & fishing retailer Cabela’s (NYSE:CAB) took respective 3% and 6% hits.
- Caribou Coffee (NASDAQ:CBOU): Up 30.7% ($3.78) to $16.10. (Read more here)
- Hovnanian (NYSE:HOV): Up 9.4% (50 cents) to $5.80.
- Cirrus Logic (NASDAQ:CRUS): Up 6.7% ($1.70) to $27.29.
- R.R. Donnelley (NASDAQ:RRD): Down 5.6% (51 cents) to $8.58.
- Trina Solar (NYSE:TSL): Down 4.6% (19 cents) to $3.95.
- Zynga (NASDAQ:ZNGA): Down 3.9% (10 cents) to $2.44.
Marc Bastow is an Assistant Editor at InvestorPlace.com. As of this writing, he was long AAPL.