S&P 500 Back to a Gain for 2011

U.S. stocks rose ahead of the holiday weekend, pushing the Standard & Poor’s 500-stock index back into positive territory for 2011, as investors cheered a break in the latest Congressional deadlock.

The Dow Jones Industrial Average gained 44 points, or 0.4%, to 12214 in morning trade. The Standard & Poor’s 500-stock index rose four points, or 0.4%, to 1258 and the Nasdaq Composite advanced five points, or 0.2%, to 2605.

Bloomberg News Traders work on the floor of the New York Stock Exchange Dec. 23. The Dow’s three-day gain has added 403 points.

Investors were encouraged by a break in the latest Congressional deadlock, after lawmakers in the House of Representatives and the Senate voted to temporarily extend a payroll tax cut by two months and agreed to begin negotiations on a yearlong extension.

Stock-market bulls are looking to extend a three-day gain that has added 403 points, or 3.4%, to the Dow. Volumes are expected to remain very light ahead of the three-day Christmas weekend.

With the gains, the S&P 500 pushed back into positive territory for 2011. With just four full sessions remaining after today’s closing bell, the broad market measure could join the Dow in the green for the year, potentially frustrating fund managers who have lagged the market.

Steve Russolillo on The News Hub tells us what’s moving markets overseas and how U.S. stock futures are faring ahead of the opening bell.

“That’s going to be psychologically important, because only 23% of fund managers are outperforming the market,” said Todd Salamone, senior vice-president of research at Schaeffer’s Investment Research. “We are right below that breakeven line, and many fund managers are underweight and are not participating in a year-end rally… It would be a real black eye to be underperforming and negative while the index is higher for the year.”

Leading the gains were telecommunications and utilities stocks. Disney gained 1.4% to lead the Dow components, while AT&T rose 1% and Verizon Communications advanced 1.1%.

European markets were broadly higher Friday, with the Stoxx Europe 600 up 0.8% to extend its weekly gain to 3.4%. The U.K. market has already closed for a four-day break. The positive tone set by recent strong U.S. data and the Italian Senate’s backing of Prime Minister Mario Monti’s austerity package on Thursday helped buoy sentiment.

Asian bourses also rallied, with China’s Shanghai Composite gaining 0.9% to post its first gain in five sessions and South Korea’s Kospi climbing 1.1%.

The dollar index has risen by about 10% since May, but it could be even better in 2012 like geopolitics, global growth, the euro, China and the U.S. economy. So what’s in store for the dollar? Dow Jones’s Martin Essex and Andrea Hotter discuss.

Gold futures slipped to below $1,610 an ounce, while crude oil futures edged higher to just short of $100 a barrel. The U.S. dollar rose against the euro and lost ground to the yen.

In economic news, a raft of economic data showed U.S. consumers spending a bit more amid small income gains and low prices.

Durable goods orders jumped 3.8% in November, topping expectations, but a key barometer of the report—new orders for non-defense capital goods excluding aircraft—dropped 1.2% for a second straight decline.

Personal consumption expenditures and U.S. incomes each grew by 0.1% in November, beating expectations for 0.2% increases. Core personal consumption expenditure prices ticked up 0.1%, in line with expectations. New home sales totaled 315,000 in November, in line with expectations.

In corporate news, shares of Rambus soared 14% after the semiconductor technology company announced a five-year patent license agreement with Broadcom. Broadcom edged down 0.1%.

United Continental fell 8.3% after the airline operator said domestic bookings are up 3.7% from the same period a year ago and international bookings were flat.

Eastman Kodak surged 12% after the company named General Counsel Laura Quatela to serve as president, effective Jan. 1, alongside current president Philip Faraci.

Elsewhere, Christopher & Banks rose 1.3% after posting a narrower-than-expected fiscal third-quarter loss and revenue that rose above estimates.

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