* Obama says fiscal deal possible within a week
* Spain bond sale disappoints; euro slips from 7-week high
* Apple shares tumble more than 6 pct, worst day in 4 years
By Leah Schnurr
NEW YORK, Dec 5 U.S. stocks rose on Wednesday
after President Barack Obama said a deal to avert the looming
fiscal cliff was possible within a week, while the euro slipped
after a disappointing Spanish bond auction.
A more than 6 percent drop in tech giant Apple made for the
stock's worst day in almost four years and constrained Wall
Street's gains. The Nasdaq fared worse than the other indexes as
Investors continued to keenly monitor any progress in talks
to avoid the so-called fiscal cliff of year-end tax hikes and
spending cuts. Obama said an agreement could be reached in a
week if Republicans compromise on taxes.
"Just the idea that we could have some kind of timeline is
enough to eliminate some of the concerns," said Todd
Schoenberger, managing partner at LandColt Capital in New York
"The fiscal cliff is the headline driver, so anything even
slightly positive will move markets."
Both Republicans and Democrats dug in on the talks, urging
quick action but still offering no compromises.
Economists say the $600 billion in tax hikes and spending
reductions that will start to go into effect at the beginning of
next year could send the economy back into recession if
politicians don't come to an agreement to avoid it.
The euro fell after hitting a seven-week high against
the dollar in early trading, stung by the disappointing Spanish
bond sale and weak euro zone economic data. The euro was down at
Investors also held off taking aggressive bets ahead of the
European Central Bank's policy meeting on Thursday, which will
be watched for any signs on next year's policy path.
"The euro is struggling to hold its ground ahead of the
European Central Bank interest rate decision amid the negative
developments coming out of the region," said David Song,
currency analyst at DailyFX in New York.
"The single currency may continue to give back the rebound
from the previous month as the fundamental outlook for the euro
Bond markets also reacted poorly to the auction, with
Spanish 10-year yields rising to 5.41 percent after demand for
the sale was below expectations.
Euro zone experts still expect Madrid to request a sovereign
bailout that would pave the way for the ECB to buy its debt, but
doubts have started to creep in again following a drop in
tensions and yields in recent weeks.
The Dow Jones industrial average finished up 82.71
points, or 0.64 percent, at 13,034.49. The Standard & Poor's 500
Index gained 2.23 points, or 0.16 percent, to 1,409.28.
The Nasdaq Composite Index dropped 22.99 points, or 0.77
percent, to 2,973.70.
Apple was the biggest drag on the Nasdaq, giving up
6.4 percent to $538.79. Analysts cited a variety of factors,
including increasing competition in the tablet market.
The FTSEurofirst 300 index closed up 0.3 percent
and, the MSCI index of world stocks rose 0.2
A mixed batch of business and retail data showed euro zone
shoppers cut back on spending by the biggest margin in six
months in October, while purchasing manager figures pointed to
another quarter of recession.
"The economic data pretty much confirmed the (euro zone)
economy is still in a very weak state," said Rabobank economist
Elwin de Groot.
In the United States, private payrolls processor ADP
reported that private-sector employers added 118,000 jobs in
November, fewer than expected as Superstorm Sandy took a toll on
hiring, though activity in the service sector continued to
Wednesday's other main economic event in Europe came in
Britain, where finance minister George Osborne warned that
growth will be weaker than expected and that he will have to
break a key debt promise.
Britain's economy was now forecast to grow by only 1.2
percent in 2013, down from the 2 percent rate predicted in