US Stock Market Closes Year On A Positive Note
Reports on the possible agreement to avert the fiscal cliff have resulted to a strong close at the US stock market. The year ended with the S&P 500 higher by 13.4 percent, which is its highest annual close since 2009. Shares at the US stock market have gone up and down depending on reports coming from Washington. Statements by Mitch McConnell, the Republican Senate leader, and President Barack Obama hinted on a possible deal that will prevent a fiscal cliff.
Despite the strong showing at the end of 2012, the US stock market can still tumble if the final agreement is not made between the two sides. All the tax issues were reportedly resolved by the two sides, according to McConnell. This eliminated a major obstacle in the discussions. A deal is necessary to prevent recession that will result from cuts in spending and increases in taxes.
The US stock market was relatively stable in 2012 as the CBOE Volatility Index remained under the 30 level, which is the upper limit that increases concerns among investors. The Dow Jones increased by 1.28 percent as it closed at 13,104. The S&P 500 Index closed at 1,426. On the other hand the Nasdaq ended the year with a 2 percent increase as it ended at 3,109.
The US stock market performed well for the year with the S&P 500 closing 13.4 percent higher. The Dow Jones increased by 7.3 percent at the end of the year and the Nasdaq ended at the year 15.9 percent higher. The strongest industry sector at the S&P was the financials, which increased by 26 percent. Only the utilities sector closed lower at the S&P as it ended 2.9 percent lower.
The Nasdaq benefited from the 4.4 increase in the share prices of Apple. The information tech sector of the S&P rode on the positive result of Apple shares in the US stock market as it increased by 2.2 percent. Apple ended the year higher by 31.4 percent as its market valued increased to $501.4 billion.
The 30 components of the Dow ended higher, with Caterpillar leading the positive results with an increase of 3.2 percent. Declines were outnumbered by advances in the US stock market, which resulted to the positive outlook in the market at the end of 2012.