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Tickers in this Article: CVX, XOM, COP, WNR, MRO, DELL, AAPL, IBM, CSCO, ORCL, INTC
Markets finally finished in the green on Friday after Congressional leaders hinted that the "fiscal cliff" meeting with President Barack Obama had gone well. Benchmarks have taken a battering ever since this problem came to the forefront, but a positive outcome on Friday instantly steered the benchmarks out of four days of consecutive losses. However, the gains on Friday were not sufficient to completely erode the week's losses.  The Dow Jones Industrial Average (DJI) gained 0.4% and closed at 12,588.31. The Standard & Poor 500 (S&P 500) ended 0.5% higher at 1,359.88. The tech-laden Nasdaq Composite Index added 0.6% to finish Friday's trading session at 2,853.13. The fear-gauge CBOE Volatility Index (VIX) slumped 8.9% to settle at 16.41. Advancers easily outpaced the decliners on the New York Stock Exchange (NYSE); as for 73% stocks that gained, 25% stocks closed lower. Total volume on the NYSE was 4.1 billion shares.

The gains, which were mostly a result of "constructive discussions" at the White House regarding the fiscal cliff, were not enough to steer markets out of weekly losses. Through the week, investor sentiment had been bogged down due to apprehensions over this issue. For the week, the Dow, S&P 500 and Nasdaq lost 1.8%, 1.5% and 1.8%, respectively. In fact, investors have been worried about the fiscal cliff since Election Day and benchmarks have lost roughly 5% from November 4. 

If Washington fails to reach a deal regarding tax hikes and budget cuts, experts project that the economy may slip into another recession. The $600 billion deficit reduction plan is slated to be effective by the start of 2013. Thus, leaders need to take effective measures to avoid the fiscal cliff at the earliest. Fortunately, the recent White House meeting offered hope after Senate Majority Leader Harry Reid and House Speaker John Boehner spoke of "constructive" discussions. Though Friday's gains failed to save markets from suffering weekly losses, optimism about a timely resolution to the fiscal cliff helped benchmarks rebound from the day's initial declines.

At the meeting, Democrats supported the spending cuts and Republicans were ready to put "revenue on the table". Striking a positive note and highlighting constructive discussions, House Speaker John Boehner commented: "It is going to be incumbent for my colleagues to show the American people that we're serious about cutting spending and solving our fiscal dilemma& I believe that we can do this and avert the fiscal cliff that right in front of us today".

On the other hand, the situation remained tense in the Middle East. Reportedly, areas near Jerusalem and Tel Aviv were hit by Palestinian missiles. The attack on Jerusalem came decades after the last such incident was noted during the 1967 Middle East war. The violence in the Middle East gave birth to apprehensions over oil supplies being affected. On the New York Mercantile Exchange, crude futures for December delivery jumped 1.4% to $86.67 per barrel.

The energy sector added modest gains and the Energy Select Sector SPDR (XLE) was up 0.4%. Among the energy stocks, Chevron Corporation (NYSE:CVX), Exxon Mobil Corporation (NYSE:XOM), ConocoPhillips (NYSE:COP), Western Refining, Inc. (NYSE:WNR) and Marathon Oil Corporation (NYSE:MRO) added 0.8%, 0.4%, 0.8%, 1.2% and 1.1%, respectively.

Separately, the Board of Governors of the Federal Reserve System reported a 0.4% drop in industrial production in October. The decline came after a 0.2% rise in September and was contrary to consensus estimates of a 0.1% gain. Hurricane Sandy seems to have had its impact and its effect will be felt in several sectors. In keeping with this theme, the report stated: "Hurricane Sandy, which held down production in the Northeast region at the end of October, is estimated to have reduced the rate of change in total output by nearly 1 percentage point. The largest estimated storm-related effects included reductions in the output of utilities, of chemicals, of food, of transportation equipment, and of computers and electronic products".

As for corporate results, tech heavyweight Dell Inc. (NASDAQ:DELL) reported a very dismal third-quarter performance. Earnings slumped heavily from the prior-year quarter and even revenues dropped over 10% year on year. The fourth-quarter outlook provided by Dell also disappointed investors as the company estimated macroeconomic challenges would continue to hurt its business. Dell's shares slumped 7.3% following the dismal results. However, the technology sector ended in the green and the Technology Select Sector SPDR (XLK) added 0.1%. Among the technology stocks, Apple Inc. (NASDAQ:AAPL), International Business Machines Corporation (NYSE:IBM), Cisco Systems, Inc. (NASDAQ:CSCO), Oracle Corporation (NASDAQ:ORCL) and Intel Corporation (NASDAQ:INTC) gained 0.4%, 0.6%, 0.3%, 0.2% and 0.8%, respectively.

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