Stocks closed higher on Wednesday, their first gain of the week, as bank shares rose and comments by President Obama made investors optimistic that a deal could be made to avoid the federal tax increases and spending cuts expected after the first of the year.
The Dow Jones industrial average rose 82.71 points, to end at 13,034.49. It had been up as much as 137. The Standard & Poor’s 500-stock index closed up 2.23 points, at 1,409.28. The Nasdaq composite index was down 22.99 points, at 2,973.70, held back by a slump in Apple.
Citigroup rose $2.17, or 6.3 percent, to $36.46 after the bank said it planned to eliminate more than 11,000 jobs, or about 4 percent of its work force, to cut expenses and improve efficiency. Travelers, the property insurer, surged $3.47, or 4.9 percent, to $74 after it announced plans to resume stock buybacks. Travelers temporarily suspended repurchases after Hurricane Sandy while it assessed its exposure to damage claims.
In lunchtime remarks to the Business Roundtable in Washington, Mr. Obama said: “We can probably solve this in about a week. It’s not that tough.” The comments, made just before noon, helped push the market higher, said Quincy Crosby, a market strategist at Prudential Financial.
Stocks have been flat for two weeks as investors waited for developments from Washington on crucial budget talks to avoid a series of government spending cuts and tax increases, which is scheduled to start Jan. 1 unless an agreement is reached to cut the budget deficit. Economists say that the measures, if put in place, could push the United States back into recession.
Apple was among the decliners, falling $37.05, or 6.4 percent, to $538.79. A Stifel Financial analyst, Aaron C. Rakers, said the decline was in part a result of comments from AT&T Mobility’s chief executive, Ralph de la Vega, who suggested that smartphone activations this quarter were lagging behind the same period a year ago. The stock has now dropped 23 percent since closing at a record $702.10 in September.
Stocks are still up this year after the Federal Reserve in September extended its bond-buying program, offsetting concern that the European debt crisis was set to spread. The Dow has gained 7 percent and the S.& P. 500 has advanced 12 percent.
“The market will hold on to its gains for the year — given the uncertainty, I don’t see any compelling reasons for an increase,” said Brian Gendreau, a market strategist with the Cetera Financial Group, a Los Angeles-based broker. “But that could change in a blink. If there’s better-than-expected news from these negotiations, the market could pop.”
A Chinese government pledge to maintain policies intended to strengthen its economy, helped raise optimism about global growth. China’s Shanghai Composite Index jumped 2.9 percent to 2,031.91. Hong Kong’s Hang Seng ended 2.2 percent higher, at 22,270.91.
A private survey showed on Wednesday that businesses in the United States added fewer workers in November, in part because the hurricane shut down factories, retail stores and other companies. The payroll processor ADP said employers added 118,000 jobs last month, falling below October’s total of 157,000, which was revised lower. Investors will also look to the monthly jobs report from the Labor Department on Friday for more economic information.
Orders to the nation’s factories rose modestly in October, helped by a big gain in demand for equipment. Factory orders edged up 0.8 percent in October, the Commerce Department said on Wednesday. That followed a 4.5 percent increase in September.
Interest rates were flat. The Treasury’s benchmark 10-year note rose 4/32, to 100 10/32, and the yield fell to 1.59 percent from 1.60 percent late Tuesday.
Freeport-McMoRan Copper and Gold fell $6.12, or 16 percent, to $32.16 after saying it had agreed to buy two oil companies, Plains Exploration and Production and McMoRan Exploration, for about $9 billion.
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Stocks Close Higher After Remarks by President
