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Stocks rally on perceived progress in 'fiscal cliff' talks

November 19, 2012|By Andrew Tangel
  • On the floor of the New York Stock Exchange.
On the floor of the New York Stock Exchange. (Seth Wenig / Associated…)

Stocks rallied more than 1% in early trading Monday on optimism that President Obama and Congress would reach a deal to resolve a looming fiscal crisis at the end of the year.

The Dow Jones industrial average gained 142 points, or 1.1%, to 12,730 shortly after the opening bell. 

The broader Standard & Poor's 500 index was up 20 points, or 1.4%, to 1,379.

The tech-heavy Nasdaq, which entered into correction territory last week, gained 44 points, or 1.6%, to 2,898.

After a week of declines last week, major U.S. indexes finished up 0.4% or more Friday after Obama and congressional leaders met at the White House about the so-called "fiscal cliff."

The automatic spending cuts and tax increases due at year's end could push the fragile U.S. economy back into recession, economists have warned.

Investors had engaged in a broad sell-off of positions after the presidential election, as Obama and Congress initially seemed to harden their positions ahead of negotiations over the fiscal cliff.

But after the leaders' first meeting, investors seemed more optimistic.

“This is within our grasp, within our reach,” Treasury Secretary Timothy Geithner told Bloomberg News over the weekend. “It’s not that complicated.”

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