US stocks closing: The S&P 500 ended at its highest level in almost two months on Monday on rising hopes that negotiations over the "fiscal cliff" were making progress and that a deal could be reached in days.
After weeks of stalemate, President Barack Obama and Republican House Speaker John Boehner met at the White House on Monday, raising hopes that Washington will be able to head off steep tax hikes and spending cuts that threaten the economy.
All of the S&P 500's 10 sectors were higher, led by financials and other growth-oriented sectors. The S&P Financial Index gained 2.1 percent, and shares of Bank of America jumped 4 percent to $11. In a research note Monday, Meredith Whitney Advisory Group shifted to a positive stance on financials and upgraded Bank of America, Citigroup and Discover Financial shares.
The S&P consumer distretionary index, up 1.8 percent, was the second-best performing sector. Investors worry the U.S. economy could slide into recession if the tax and spending changes are implemented.
Boehner has edged closer to Obama's position by proposing to extend lower tax rates for everyone who earns less than $1 million. Still, his position remains far from that of President Obama.
"Trumping everything right now are the fiscal cliff talks.
It seems like progress is being made. I think it's getting to the nitty gritty," said Alan Lancz, president of Alan B. Lancz & Associates Inc. in Toledo, Ohio. "The bet right now is that something will come by the end of this week."
The Dow Jones industrial average was up 100.38 points, or 0.76 percent, at 13,235.39. The Standard & Poor's 500 Index was up 16.78 points, or 1.19 percent, at 1,430.36, its highest close since Oct. 22. The Nasdaq Composite Index was up 39.27 points, or 1.32 percent, at 3,010.60.
The gains, which came on lighter-than-usual volume, ended a two-day losing streak on the S&P 500. The index also had its best daily percentage gain since Nov. 23. Volume was roughly 6.2 billion shares traded on the New York Stock Exchange, the Nasdaq and the NYSE MKT, compared with the year-to-date average daily closing volume of 6.4 billion.
In the financial sector, American International Group Inc. shares rose 3 percent to $34.95 on plans to sell as much as $6.5 billion of AIA Group Ltd. Advancing stocks also included those in the home construction sector, which rose 4.5 percent.
"People are looking for sectors to play,