Fiscal Cliff Optimism May Generate Further Buying Interest

With traders expressing continued optimism about the looming fiscal cliff, stocks may extend a recent upward move in early trading on Wednesday. The major index futures are currently pointing to a moderately higher open for the markets, with the Dow futures up by 32 points.

The markets may continue to benefit from signs of progress in budget negotiations between President Barack Obama and House Speaker John Boehner, R-Ohio.

Although the lawmakers have not yet reached an agreement with less than two weeks to go before the year-end deadline, recent moves toward a compromise have generated buying interest on Wall Street.

News that Standard & Poor's raised its credit rating on Greece may also help to push stocks higher, with S&P upgrading the rating on Greece to B-minus from selective default.

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S&P said the upgrade reflects the recent completion of Greece's distressed debt buyback as well as the eurozone's strong determination to preserve Greek membership.

However, the positive sentiment may be partly offset by the release of a report from the Commerce Department showing that U.S. housing starts came in below economist estimates in November.

The report said housing starts fell 3.0 percent to an annual rate of 861,000 in November from the revised October estimate of 888,000. Economists had expected housing starts to fall to 865,000 from the 894,000 originally reported for the previous month.

At the same time, the Commerce Department said building permits rose 3.6 percent to an annual rate of 899,000 in November from the revised October rate of 868,000.

One thought on “Fiscal Cliff Optimism May Generate Further Buying Interest

  1. Stock??????????get rid of it rather sooner than later.Climbing stock is a bait,the drop in not so distant future will wipe out lot of people.Buy gold,this drop is magnificent,won´t last for long.Martin

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