Stocks Jump on Hopes for Budget Deal

Stocks rallied on Wednesday after comments by President Barack Obama and House Speaker John Boehner bolstered thinking a budget deal would be reached. The Dow Jones Industrial Average added 106.98 points, or 0.83%, to 12,985.11. The S&P 500 index rose 10.99 points, or 0.79%, to 1,409.93. The Nasdaq Composite climbed 23.99 points, or 0.81%, to 2,991.78.

President Barack Obama said Wednesday he believes that members of both parties can reach a “framework” on a debt-cutting deal before Christmas, making his case with a mix of optimism and pressure on congressional Republicans to keep tax rates from rising on the middle class.

Builders in the U.S. sold fewer new homes than forecast in October and purchases were revised down for the prior month. Sales dropped 0.3 percent to a 368,000 annual pace following a 369,000 rate in September that was 20,000 lower than initially reported, figures from the Commerce Department showed today in Washington.

A pickup in consumer spending and steady home sales helped lift economic growth from October through early November in most parts of the United States, according to a Federal Reserve survey released Wednesday. The one exception was the Northeast, which was slowed by Superstorm Sandy.

Moody’s Investors Service is lowering its long-term credit rating for Hewlett-Packard, saying the technology giant will have trouble increasing sales of many of its products. Moody’s says it lowered H-P’s senior unsecured credit rating by one notch, to “Baa1” from “A3.”

BP has been temporarily suspended from new contracts with the US government, the Environmental Protection Agency (EPA) has said.