Traders work on the floor of the New York Stock Exchange in this file photo.© Brendan McDermid / Reuters/Reuters
North American stocks rallied on Tuesday, a day ahead of a monetary policy announcement from the Federal Reserve and amid optimism that Washington might be heading toward a compromise in budget negotiations.
The S&P 500 closed at 1427.84, up 9.29 points or 0.7 per cent. That marks its fifth day of consecutive gains and an overall rally of 5.5 per cent since mid-November, when stocks slumped after the U.S. presidential election.
The blue-chip Dow Jones industrial average closed at 13,248.44, up 78.56 points or 0.6 per cent. In Canada, the S&P/TSX composite index closed at 12,282.36, up 51.89 points or 0.4 per cent.
The moves followed earlier reports that Republicans and Democrats were working toward an agreement to avoid the so-called "fiscal cliff" of automatic tax increases and spending cuts in the New Year – with Bloomberg News reporting that President Barack Obama had sounded conciliatory in remarks made at a Daimler AG plant on Monday.
At noon, John Boehner addressed the House but provided little insight on progress in negotiations, saying only that he remains optimistic that an agreement can be reached but that Mr. Obama must get serious in talks.
In Germany, a sentiment survey among analysts and investors jumped into positive territory in November, topping expectations.
American International Group Inc. rose 5.7 per cent after the Treasury Department said it would sell its final stake in the company, which was bailed out by the government during the financial crisis.
Research In Motion Ltd. rose 5.8 per cent and hit a seven-month high after it said that developers are showing a rising interest in endorsing its upcoming BlackBerry 10 platform.
Hudson's Bay Co. fell 0.2 per cent after it reported a third quarter loss of $8.5-million or 8 cents a share but said that it would consider spinning off its real estate assets into a rea
Among commodities, crude oil rose to $85.79 (U.S.) a barrel, up 23 cents. Gold fell to $1,709.60 an ounce, down $4.80.
Suncor Energy Inc. rose 0.2 per cent and Barrick Gold Corp. fell 0.7 per cent.
David Berman