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Stocks gain on German investor confidence

Stock prices moved higher for the fifth consecutive session Tuesday as discussions regarding the "fiscal cliff" seemed to be moving forward.

The Dow Jones Industrial Average gained 78.56 points to 13,248.44. The Nasdaq Composite Index was up 35.34 points to 3,022.30, and the S&P 500 Stock Index rose 9.29 points to 1,427.84, its highest close since the election on Nov. 6.

Investors will await word Wednesday from the Federal Reserve after the conclusion of its two-day meeting. It is unlikely the Fed will waver from its easing policies, although Chairman Ben Bernanke will meet with reporters after the meeting to discuss policy heading toward 2013.

Oil prices rose for the first time in six sessions, up 23 cents to $85.79 a barrel. OPEC will meet on Wednesday to discuss production and global demand. Gold fell $4.80 to $1,709.60 an ounce.

Stocks rose as German investor confidence jumped in December on speculation Europe’s largest economy will gather momentum next year. The trade deficit in the United States widened in October as the biggest slump in exports in almost four years outweighed a drop in imports.

American International Group Inc. (NYSE: AIG) added 5.7 percent to $35.26. The U.S. Treasury Department is selling 234.2 million shares at $32.50 each in the sixth offering since the 2008 rescue. The proceeds boost the profit on the rescue that began in 2008 to $22.7 billion, the Treasury said in a statement.

Technology shares advanced the most among 10 industries, adding 1.4 percent. Apple Inc. (Nasdaq: AAPL) gained 2.2 percent to $541.39. Morgan Stanley (NYSE: MS) reiterated its recommendation on the shares as its Smart TV survey suggests significant potential from the possible introduction of televisions, with consumers willing to pay a 20 percent premium.

Salesforce.com Inc. (NYSE: CRM) rose 4.2 percent to $165. Susquehanna Financial Group raised its price estimate for the largest maker of online customer-management software to $185 from $175, citing growth prospects as corporate customers do more computing tasks over the Internet.

Delta Air Lines Inc. (NYSE: DAL) increased 5.1 percent to $10.66. The Atlanta-based carrier agreed to buy the 49 percent stake in Richard Branson’s Virgin Atlantic for $360 million to boost its share of the lucrative trans-Atlantic travel market. Virgin, the biggest long-haul rival to British Airways at London’s Heathrow airport, will also join forces with Delta for the operation of flights between Europe and North America, the companies said in a statement.

Genworth Financial Inc. (NYSE: GNW) advanced 2.7 percent to $6.90 after the insurer named Thomas McInerney as chief executive officer to stanch losses from insuring mortgages in the United States. McInerney, previously CEO of ING Americas, replaces Michael Fraizer, who stepped down May 1, the Richmond, Va.-based company said Tuesday. Genworth shares had plunged more than 80 percent since the end of 2006.

TripAdvisor Inc. (Nasdaq: TRIP) surged the most in the S&P 500, advancing 6.6 percent to $40.91. Liberty Interactive Corp. bought about $300 million of TripAdvisor shares, gaining voting control of the online travel-review company from billionaire Barry Diller, who stepped down as its chairman.

Facebook Inc. (Nasdaq: FB) will join the Nasdaq-100 Index Wednesday, replacing Infosys Ltd. (Nasdaq: INFY). The operator of the social network with more than 1 billion users will represent 1.02 percent of the index, and require exchange-traded funds that track the gauge to own $356.2 million worth of Facebook shares, according to Markit, a London-based research firm. Facebook added 0.5 percent to $27.98.

Stillwater Mining Co. (NYSE: SWC), a platinum producer in Montana, increased 7.2 percent to $12.30. The company will replace JDA Software Group Inc. (Nasdaq: JDAS) in the S&P SmallCap 600 Index after the close of trading on Thursday.

WebMD Health Corp. (Nasdaq: WBMD), the online provider of medical information, advanced 12 percent to $15.45 after saying it will eliminate 250 jobs, or 14 percent of the work force, in a cost-cutting measure designed to deal with a decline in drug-company advertising. The New York-based company said it plans to take a pretax restructuring charge of $6 million to $8 million for the fourth quarter.

Discount stores fell the most among the 500 stocks in the benchmark U.S. equity index after Dollar General Corp. (NYSE: DG), the largest U.S. dollar-store chain, said it will respond to rivals’ price cuts in the fourth quarter. The Goodlettsville, Tenn.-based company forecast annual sales growth would be at the lower end of its estimate, rising 8 percent to 8.5 percent from the earlier projection of 8 percent to 9 percent.

Dollar General fell 7.8 percent to $42.94, while Family Dollar Stores Inc. (NYSE: FDO) declined 8.4 percent to $64.68, and Dollar Tree Inc. (Nasdaq: DLTR) slipped 3.7 percent to $37.98.

Hertz Global Holdings Inc. (NYSE: HTZ) dropped 1.9 percent to $15.90. The second-largest U.S. rental-car company declined after three investors sold 50 million of its shares.

The cost of hedging against losses in U.S. energy companies has fallen to an 18-month low after the shares trailed the broader market and data signaled global economic growth may be picking up. Puts protecting against a 10 percent decline in the Energy Select Sector SPDR Fund cost 5.57 points more than calls betting on a 10 percent rally, the smallest gap since May 2011, according to three-month data compiled by Bloomberg.



Bloomberg News contributed to this report.



Related Links:

New York Stock Exchange: nyse.com

Nasdaq Stock Market: nasdaq.com

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