Stocks rallied on word a deal on the fiscal cliff was in sight with only hours to go before the midnight deadline. But the final day of trading for 2012 wrapped up without any resolution from Congress.
Stocks snapped a five-day losing streak to end with gains across the board. For the year, the benchmark indexes were all higher, with the Nasdaq climbing 16 percent.
While the market ended on a positive note, Americans are fed up with Congress over the possible $600 billion in tax hikes and spending cuts.
These American taxpayers chimed in anonymously from Times Square, New York. “It is going to hurt the average American. It’s going to take money from our paycheck because of the higher taxes and it might hurt the economy.”
“It’s really not fair for the common man to be stuck with all the taxes,” said another.
“The whole thing is Washington is unable to come to any kind of conclusion, any type of comradely, which is what this whole country is based on. This is the season of goodwill, peace toward men. We’ve had anything but,” concluded the third.
“Our government is broken right now to the extent of compromise. If we don’t clear it up, we’re going to have issues.”
Despite weeks of turmoil, Douglas Blake at Newbridge Securities says the market has, for the most part, taken it in stride. “The one place that I would look as a measure is the volatility index,” he said. “We call that the fear gauge, and even though it has spiked a bit, it’s at very low levels right around 20. To contextualize that it was around 80 during the Lehman failure, and 40 during September 11th, so at 20 it reflects the markets are a little uncomfortable, but certainly not panicked.”
Gains in Apple helped lift the Nasdaq. The stock rose 4 percent. For the year it is up a whopping 31 percent.
Financial stocks were among the year’s strongest performers with the S&P financial index surging 25 percent. Bank of America led the group higher. Fourteen large banks got a boost Friday as they neared a $10 billion settlement on allegations they illegally cut corners when foreclosing on home mortgages.
In Europe stocks ended slightly higher for the day, and posted brisk gains for the year as central bankers calmed fears of a euro zone breakup.
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