Technology sector leads a strong rally at Wall Street

For the day, the Dow ended higher by 78.56 points (0.6%) at 13,248.44. Nasdaq ended higher by 35.34 points (1.2%) at 3,022.3. S&P 500 ended higher by 9.29 points (0.65%) at 1,427.84. Dow was trading higher by 136 points earlier during the day.

Among the ten economic sectors, the technology, financial and healthcare sectors led the rally. Most of the Dow components finished higher. Chip-manufacturer Intel was the top gainer in the Dow.

The mood was buoyed by a report in The Wall Street Journal late Monday that budget negotiations between the White House and House Speaker John Boehner have made steady progress in recent days. Addressing the House of Representatives Tuesday, Boehner said he was "hopeful" an accord would be reached.

Chip-manufacturer Intel was the top gainer in the Dow, rising 2.8%. The technology sector led the market higher, with Apple and Texas Instruments posting particularly strong gains. Texas Instruments rose 4% despite narrowing its revenue guidance, and trimming its earnings guidance to account for restructuring.

Financial stocks were also largely in-line with the broader market. Morgan Stanley was higher by 3.9% as it led the majors. Earlier reports indicated the company may file for regulatory approval in order to begin a share buyback program. Looking at other majors, Bank of America and JPMorgan Chase are rose 1.1% and 1.7%, respectively. Elsewhere, American International Group is rallying 4.6% after confirming the U.S. Treasury will sell its remaining shares of AIG common stock.

The Federal Reserve's "Operation Twist" program is scheduled to end this month and the FOMC members will decide this week whether to extend a bond-buying program. Many believe the Fed will announce it will continue to purchase longer-term U.S. Treasuries, while stopping its sales of shorter-term government debt, as was the case in the Twist operations. The new plan would be ostensibly printing of greenbacks by the Fed and would be raw-commodity market bullish.

Also in the U.S, attention of the market place remains on the "fiscal cliff" tax increases and spending cuts that is fast approaching. There is still no apparent movement from either side on the matter.

In overnight news, the feature was the German ZEW economic expectations index rising to a much higher-than-expected reading of 6.9 in December versus November's minus 15.7. The report boosted European stocks and the Euro currency, while Spanish and Italian bond yields fell.

The dollar index, which weighs the strength of the dollar against a basket of six other currencies, fell by 0.3% on Tuesday.

Among economic data expected for the day, the Commerce Department in US reported on Tuesday, 11 December 2012 that U.S. trade deficit increased 4.9% in October to $42.2 billion, as imports of crude oil rose and American exports of manufactured goods fell to the lowest level in nearly a year. The report said that the imports of foreign goods into the U.S. declined by 2.1% to $222.8 billion in October, but exports fell by 3.6% to $180.5 billion to account for the wider trade gap. Market had forecast the trade deficit to increase to a seasonally adjusted $42.5 billion in October. The deficit in September was revised down to $40.3 billion from $41.5 billion.

Separate data showed that October wholesale inventories increased by 0.6%, which is higher than the increase of 0.4% expected by the market.

More than 690 million shares traded on the New York Stock Exchange; composite volume topped 3.6 billion.

Indian ADRs mostly lower on Tuesday. In the IT space, Wipro was down 0.6% and Infosys was down 0.3%. In the Banking space, ICICI Bank was down 1% HDFC Bank was down 0.33%. In the other space, Sterlite was up 0.7%, Dr Reddys was down 1% and Tata Motors was down 1.8%.

For tomorrow, the export-import price is the only economic report expected. Earning reports will continue to pour in.

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