Perceived progress on ‘fiscal cliff’ drives Wall Street stocks higher

Just when you thought the world was ending, things are looking up on Wall Street. Traders pushed stocks higher Tuesday, buoyed by optimism about a deal to resolve the “fiscal cliff” and an upgrade to Greece’s credit rating, putting the S&P; on track for its strongest two-day run in weeks.

At 11:45 a.m. PST, the Dow Jones industrial average rose 0.69%, to 13,326.58, while the Nasdaq composite inched up 1.17% to 3,045.77. The S&P; 500 rose 0.86% to 1,442.75, the highest it has been in a month.

“The market is perceiving progress on the fiscal-cliff front,” said Todd Salamone, senior vice president of research at Schaeffer’s Investment. “Even though Plan B from [House Speaker John A.] Boehner is vague, the fact that they’re seeing counter offers is perceived as a step in the right direction.”

Also Tuesday, Standard & Poor’s said that the “strong determination” of European governments to keep Greece in the Eurozone allowed it to move the country’s credit rating from selective default to B-. That allowed investors to feel some optimism on another concern that’s kept the market muted this year -- instability in Europe’s financial system.

Should good economic news continue, Salamone said, the market could continue to rise in the months ahead.

“It’s a market that is ripe for a rally,” he said. “There’s a lot of pent-up demand.”

Last year in December, the market tanked as the government continued to struggle with budget issues. But once those issues were resolved -- albeit temporarily -- the S&P; rallied 25%. It hasn’t gone back to last year’s lows.

Banks were among the strongest stocks Tuesday. At around noon PST, Goldman Sachs was up 2.84% to 127.02, while Morgan Stanley rose 2.5% to 19. Bank of America rose 1.45% to 11.16.

One of the few low spots in the market were shares of gun makers. Shares of companies such as Smith & Wesson and Sturm, Ruger & Co. continued to fall as stores pulled certain types of guns from their shelves in the wake of the Newtown, Conn., shootings.

At one point, Smith & Wesson fell 10% to 7.74, while Sturm, Ruger fell 8% to $40.42.

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