(By Balachander) U.S. stocks ended on a positive note as investors weighed budget talks in Washington and a set of positive economic reports.
The S&P 500 Index advanced 0.43 percent to end at 1,415.95. The Dow Jones Industrial Average added 0.28 percent to finish at 13,021.82. The Nasdaq Composite Index gained 0.68 percent to close at 3,012.03.
Stocks rose for the second day amid optimism that lawmakers will reach a deal to avert the so-called "fiscal cliff".
Speaker of the House John Boehner said there had been "no substantive progress" in fiscal talks, while Senator Chuck Schumer said there has been progress in budget negotiations.
President Barack Obama has pushed for higher taxes on wealthy Americans to address the fiscal cliff of roughly $600 billion in spending cuts and tax increases that could hit economic growth.
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On the data front, a report from the U.S. Commerce Department showed that the gross domestic product grew at a 2.7 percent annual pace in the third quarter, up from its initial estimate of a 2.0 percent increase. Economists expected growth to be upwardly revised to 2.8 percent.
The number of Americans who continued to receive jobless benefits declined last week, a government data showed. Jobless claims fell 23,000 to 393,000 for the week ended Nov. 24 from a revised 416,000, but came in slightly higher than economists projection of 390,000 applications.
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Meanwhile, pending home sales for October jumped 5.2 percent, topping expectations of a 0.8 percent rise, following a revised 0.4 percent increase in September.
Hot Stocks Of The Day: TIF, KR, KSS, CREE, BKS, GPS, ARO, SMTC
In corporate news, Tiffany & Co. (NYSE: TIF) retreated 6.17 percent after the jeweler reduced its 2012 forecast yet again. The company's third-quarter earnings trailed market expectations amid sharp contraction of margins.
Kroger Co. (NYSE: KR) rose 4.75 percent after the supermarkets operator raised its 2012 guidance following stronger-than-forecast quarterly earnings.
Kohl's Corp. (NYSE: KSS) tumbled 11.98 percent after the operator of family-oriented department stores posted November sales that were lower than expectations.
Cree Inc. (NASDAQ: CREE) shares were downgraded to "hold" from "buy" by Deutsche Bank analyst Vishal Shah who believes risk-reward is now balanced. The stock ended 6.02 percent lower.
Barnes & Noble Inc. (NYSE: BKS) tumbled 11.15 percent after the bookseller reported weaker-than-expected revenue for the second quarter.
Gap Inc. (NYSE: GPS) lost 4.08 percent after the clothing company's November comparable sales trailed market expectations.
Aeropostale Inc. (NYSE: ARO) retreated 4.96 percent after the casual apparel company issued a downbeat outlook for the fourth quarter.
Semtech Corp. (NASDAQ: SMTC) climbed 11.80 percent after the semiconductor supplier posted quarterly results that beat Wall Street projections.
European markets ended sharply higher, with Germany's DAX up 0.78 percent to close at 7,400.96. France's CAC40 climbed 1.53 percent to finish at 3,568.88. The U.K.'s FTSE 100 gained 1.15 percent to end at 5,870.30.
Among Asian markets, China's Shanghai Stock Exchange Composite Index declined 0.51 percent to finish at 1,963.49. Japan's Nikkei 225 added 0.99 percent to finish at 9,400.88. Hong Kong's Hang Seng Index gained 0.99 percent to end at 21,922.89. India's BSE Sensex ended at 19,170.91, up 1.75 percent.
Commodity & Currency Scan
Crude oil futures climbed 1.54 percent to $87.81 per barrel, while natural gas futures dropped 3.87 percent to $3.65 per million metric British thermal units. Gold futures added 0.53 percent to $1,727.9 per ounce and silver futures jumped 1.66 percent to $34.33 per ounce.
In the currency market, the euro added 0.18 percent against the U.S. dollar to 1.2976. The British pound inched up 0.16 percent against the greenback to 1.6039, while the dollar remained unchanged against the Japanese yen at 82.0800.