Stocks See Initial Strength Amid Optimism About Tax Cuts

Stocks showed a notable move to the upside at the start of trading on Tuesday, as traders reacted positively to news of an agreement on an extension of the Bush tax cuts. The major averages all climbed firmly into positive territory after ending the previous session mixed.

The initial strength in the markets came after President Barack Obama said that he has come to an agreement with Congressional Republicans on a tentative framework for the extension of the Bush tax cuts, which are due to expire at the end of the year.

The agreement would extend all of the tax cuts for two years, extend unemployment benefits for the long-term jobless for 13 months, and reduce payroll taxes for all workers for a full year.

Amid a light day on the economic front, the U.S. Federal Reserve will release its monthly consumer credit report for October at 3:00 p.m. ET. Economists expect the consumer credit report to show a decline of $2.3 billion.

In economic news from around the globe, the Reserve Bank of Australia decided to maintain its key lending rate at 4.75 percent as expected, with the bank calling the rate "appropriate" for the current economic outlook.

The Bank of Canada also left interest rates unchanged, with its overnight rate remaining at 1.0 percent today. BoC officials indicated that rate hikes would be carefully considered amid the ongoing debt contagion in Europe and struggling exports.

Electronic storage stocks are seeing significant strength in early trading, while housing, energy, semiconductor, and banking stocks  are also posting notable gains. Most of the other major sectors have also moved to the upside.

While the major averages have not seen much follow-through on their initial upward move, they are holding on to strong gains. The Dow is up 81.55 points or 0.7 percent at 11,443.74, the Nasdaq is up 25.54 points or 1 percent at 2,620.46 and the S&P 500 is up 10.99 points or 0.9 percent at 1,234.11.

Stocks See Initial Strength Amid Optimism About Tax Cuts

Stocks showed a notable move to the upside at the start of trading on Tuesday, as traders reacted positively to news of an agreement on an extension of the Bush tax cuts. The major averages all climbed firmly into positive territory after ending the previous session mixed.

The initial strength in the markets came after President Barack Obama said that he has come to an agreement with Congressional Republicans on a tentative framework for the extension of the Bush tax cuts, which are due to expire at the end of the year.

The agreement would extend all of the tax cuts for two years, extend unemployment benefits for the long-term jobless for 13 months, and reduce payroll taxes for all workers for a full year.

Elsewhere, most Asian stocks rose, the euro held steady and European stocks advanced on Tuesday, as firmer oil and metals prices and a move by the United States Treasury to sell its remaining shares in Citigroup boosted sentiment.

Also, an agreement between President Barack Obama and opposition Republicans to extend expiring tax cuts for all Americans and to extend unemployment benefits for the long-term jobless for 13 months offset worries about potential tightening of monetary conditions in China and lingering European debt worries.

Stocks Posting Modest Gains In Early Trading

Stocks have moved modestly higher in early trading on Thursday, adding to the standout gains posted in the previous session. The major averages have all climbed above the unchanged line, although buying interest remains relatively subdued.

The early strength in the markets may be partly due to the release of generally upbeat November sales results from major retailers, which has helped to offset any negative sentiment generated by a bigger than expected increase in weekly jobless claims.

The Labor Department released a report showing that initial jobless claims rose by more than expected in the week ended November 27th after falling to a two-year low in the previous week.

Jobless claims rose to 436,000 from the previous week's revised figure of 410,000. Economists had been expecting jobless claims to increase to 422,000 from the 407,000 originally reported for the previous week.

At 10:00 a.m. ET, the National Association of Realtors will release its report on pending home sales for the month of October. Economists expect that pending home sales remained unchanged after a 1.8 percent in September.

The retail sector is also in focus today, with most major U.S. retailers reporting November sales figures above analyst estimates.

Bon-Ton (BONT) said its November same-store sales rose by 2.9 percent, Target's (TGT) same-store sales increased 5.5 percent, Costco Wholesale Corp. (COST) saw a same-store sales jump of 6 percent and Abercrombie & Fitch Co. (ANF) said its same-store sales surged up by 22 percent.

In other corporate news, food and beverage giant PepsiCo, Inc. (PEP) announced that it has agreed to acquire 66 percent of Russia's leading branded food and beverage company Wimm-Bill-Dann Foods (WBD) for $3.8 billion. The total enterprise value of the deal is nearly $5.4 billion.

Metal stocks are turning in some of the market's best performances, with steel and gold stocks posting notable gains. Banking stocks have also shown a strong move to the upside, while most of the other major sectors are showing more modest moves.

The major averages have seen some further upside in the past few minutes, climbing a little more firmly into positive territory. The Dow is up 32.43 points or 0.3 percent at 11,288.21, the Nasdaq is up 9.71 points or 0.4 percent at 2,559.14 and the S&P 500 is up 4.50 points or 0.4 percent at 1,210.57.