* Senate to convene at 11 a.m. to discuss 'fiscal cliff'
* S&P 500 on track for double-digits gains for 2012
* Indexes: Dow flat, S&P up 0.3 pct, Nasdaq up 0.6 pct
By Angela Moon
NEW YORK, Dec 31 Wall Street edged higher in a
choppy session on Monday, with the S&P 500 on track for
double-digit gains for the year, as politicians bargained for a
deal to avert the "fiscal cliff."
Taxes were set to rise for many Americans this week unless
U.S. lawmakers could cut a last-minute deal, an outcome that was
possible but seemed unlikely.
Senate Majority Leader Harry Reid said the Senate would
reconvene at 11 a.m. Washington time (1600 GMT) to continue
discussions on the fiscal cliff - $600 billion in automatic tax
hikes and spending cuts that kick in Jan. 1.
The last trading session of the year is expected to be
volatile on low volume and as investors keep a close eye on
headlines out of Washington.
"Even if we end up with a deal, it will be just a band-aid,
not a real fix. So we will see a volatile session today, with
all eyes on the debates, comments out of Washington," said Tim
Ghriskey, chief investment officer at Solaris Group in Bedford
Hills, New York.
"I'm not expecting a major rally or a selloff," Ghriskey
Despite recent declines over the stalemated budget talks,
the S&P 500 is up about 11.5 percent for the year compared with
a nearly flat performance in 2011. The Dow industrials are about
6 percent higher and the Nasdaq composite is up about 14 percent
The Dow Jones industrial average was up 7.45 points,
or 0.06 percent, at 12,945.56. The Standard & Poor's 500 Index
was up 4.53 points, or 0.32 percent, at 1,406.96. The
Nasdaq Composite Index was up 17.63 points, or 0.60
percent, at 2,977.95.
Bank stocks rose after a New York Times report that U.S.
regulators are nearing a $10 billion settlement with several
banks that would end the government's efforts to hold lenders
responsible for faulty foreclosure practices.
Bank of America Corp was up 0.4 percent at $11.41
and Citigroup rose 0.2 percent to $39.08.
While midnight is the deadline for a fiscal deal, the
government can pass legislation in 2013 that retroactively
cancels or moderates the impact of going over the fiscal cliff.
Investors have remained relatively sanguine about the
process, believing it will eventually be solved. In the past two
months markets have not shown the kind of volatility that was
present during the fight to raise the debt ceiling in 2011.
Rather, equities have largely performed well in the last two
months, buoyed by signs of economic recovery, an improving
housing market and monetary policy designed to stimulate growth
and lower unemployment.
However, U.S. stocks dropped on Friday, with significant
losses in the last minutes of trading, as prospects for a deal
worsened at the beginning of the weekend.
On Sunday, President Barack Obama said on NBC's "Meet the
Press" investors could begin to show greater concerns in the new