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US Stock Market: edges up on tech shares rally, investors keep eye on Washington

Capital Market  |  Mumbai 

US shares finished slight higher after circling the breakeven line for much of the session on Thursday, 6 December 2012, with gains were technology players after Apple Inc. rebounded from its biggest decline in four years

The Dow Jones industrial average gained 39.55 points, or 0.3%, to 13,074.04 points. The Standard & Poor's 500 index added 4.66 points, or 0.33%, to 1,413.94 and the Nasdaq composite climbed 15.57 points, or 0.52%, to 2,989.27

The S&P technology index was the best performing of the S&P 500's 10 major sectors, gaining 0.8%. Market giant Apple ended the day 1.6% higher at $547.24, a day after losing 6.4% in its worst one-day drop in four years, tracking boost from CEO Tim Cook statement that Apple will produce one of its Mac computers in the United States next year and will spend $100 million in 2013 to shift production of the line from China.

Broadcom's stock rose 3.2% to $33.36 after the company forecasted its fourth-quarter revenue at the high end of its target range.

Starbucks rose 5.7% after settling a British tax spat with a commitment to pay around $16.1 million in corporate taxes in Britain in each of the next two years, after being tarred by politicians as a tax dodger.

Garmin shares jumped 5.7% to $41.99 after Standard & Poor's said it would add the navigation device maker to the S&P 500 index, replacing R. R. Donnelley & Sons after the close of trading on December 11.

Freeport shares closed down 4.2%, extending its 16% slump on Wednesday after it announced a $9 billion deal to buy two US oil and gas firms at hefty premiums. The deals were widely criticized as appearing to heavily benefit the board members and top shareholders in Freeport that also had interests in the other two companies, McMoRan Exploration and Plains Exploration.

However, broader moves were limited, as traders focused on the fiscal cliff debate. Investors' biggest concern remains the collection of automatic tax increases and federal spending cuts scheduled to start January 1. President Barack said the White House and Republicans could reach an agreement in about a week if the Republicans drop their opposition to raising taxes on making more than $250,000 a year.

While Republican leaders in the U.

S. House of Representatives insist that raising tax rates on the rich is not negotiable, some GOP lawmakers now see it as inevitable to avoid the fiscal cliff. Without action from Congress, tax cuts on capital gains and dividends will expire at the end of 2012.

Most investors believe and Congressional Republicans will strike a budget deal to avoid this fiscal cliff before the year is out. Until they reach an agreement, however, the will likely be hostage to out of Washington.

On the economic front, the US Labor Department said on Thursday that Jobless claims decreased by 25,000 to a seasonally adjusted 370,000 in the week ended Dec. 1. The decline was a sign that the spike in applications caused by Superstorm Sandy has faded. The report comes a day before the government releases its closely watched jobs survey.

On currency front, the US dollar appreciated against the euro on Thursday after comments from European Central Bank President Mario Draghi boosted market expectations that the central bank could lower interest rates. The ICE dollar index (DXY), which tracks the currency against a basket of six major currencies, rose to 80.291 later afternoon Thursday, from 79.774 prior day. The greenback strengthened to $1.2956 against the euro from Wednesday's closing of $1.3078.

In ADR section, Indian ADRs ended higher on Thursday, with major gainers were Mahangar Telephone Nigam (+5.4%), Sterlite Industries (India) (+2.8%), (+ 2.8%), WisdomTree India (+1.3%), and PowerShare India (+1%).

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First Published: Fri, December 07 2012. 23:32 IST