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GLOBAL MARKETS-Wall St rallies on fiscal hopes; Spain hits euro
December 5, 2012 / 7:30 PM / 5 years ago

GLOBAL MARKETS-Wall St rallies on fiscal hopes; Spain hits euro

* Obama says fiscal deal possible within a week
    * Spain bond sale disappoints; euro slips from 7-week high
    * Shares of Apple tumble more than 4 pct
    * U.S. data shows private sector hiring hit by storm

    By Leah Schnurr
    NEW YORK, Dec 5 (Reuters) - U.S. stocks rose in a choppy
session 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.
    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."
    Still, 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.
    A more than 4 percent drop in shares of tech giant Apple
constrained gains, and the Nasdaq fared worse than the other
    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
    "My theory is that this is the last week of an equity market
rally, and therefore the last week of an euro/dollar rally,"
said Andrew Busch, senior currency strategist at BMO Capital in
    Bond markets also reacted poorly to the auction, with
Spanish 10-year yields rising to 5.42 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 European Central Bank 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 gained 119.15
points, or 0.92 percent, to 13,070.93. The Standard & Poor's 500
Index added 6.29 points, or 0.45 percent, to 1,413.34.
The Nasdaq Composite Index was off 12.32 points, or 0.41
percent, to 2,984.37. 
    Apple was the biggest drag on the Nasdaq, giving up
4.6 percent to $549.24 as analysts cited factors such as
increasing competition in the tablet market. 
    The FTSEurofirst 300 index closed up 0.3 percent
and, the MSCI index of world stocks rose 0.4
    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

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