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XLF, GS, MS , XLE, BHI, SLB, HAL, BTU, CNX, ARB, NLSN, XHB, DHI, PHM, NAV, GIS, FDX

DJIA 13350.96+115.57 (0.87%) NAS 3054.53+43.93 (1.46%) S&P 5001446.79+16.43 (1.15%)

US Stocks registered broad gains Tuesday on comments from Washington lawmakers signal the budget debate is heating up, though an agreement has not yet been reached, the markets welcome the developments and spent the day moving North. The S&P 500 advanced 1.2%.

The SPDR Financial Select Sector ETF NYSE:XLF 16.57, +0.24 gained over 2.0% Monday, and the financial sector proxy added another 1.5% today. The space was expected to show heightened sensitivity to hints of progress in the budget debate, and today’s developments were received positively by the majors.

Goldman Sachs NYSE:GS 127.77, +4.28 and Morgan Stanley NYSE:MS 19.12, +0.59 outperformed their peers as both gained over 3.0%.

Energy stocks were supported by strength in crude oil and the SPDR Energy Select Sector ETF NYSEArca:XLE 73.19, +1.32 settled higher by 1.8%.

Baker Hughes Incorporated NYSE:BHI 41.93, +1.29 warned that Q-4 North American revenue and profit margins will likely be lower than previously expected.. BHI finished with a gain of 3.2% and peers Halliburton NYSE:HAL 34.80, +1.26 and Schlumberger NYSE:SLB 71.35, +1.67 rallied 3.8% and 2.4%, respectively.

Coal stocks outperformed following comments from the International Energy Agency, which said it expects Coal to eclipse Crude Oil as world’s top energy source around Y 2017

CONSOL Energy NYSE:CNX 34.29, +0.62 and Peabody Energy NYSE:BTU 27.37, +0.74 both gained near 2.0%.

M&A news, Arbitron (ARB 47.03, +8.99) surged 23.6% after agreeing to be acquired by Nielsen NYSE:NLSN 30.92, +1.30 for $48 per share. The transaction represents a premium of approximately 26% to Arbitron’s closing price on 17 December 2012.

The NAHB Housing Market Index for December registered a reading of 47. That is up from the prior month’s revised reading of 45, and in-line with expectations among economists polled by Briefing.com.

Homebuilders benefited from Tuesday’s rally, and the SPDR S&P Homebuilders ETF NYSEArca:XHB 26.89, +0.55 finished higher by 2.1%. The year-long strength in homebuilder stocks has lifted the ETF to its best level since July 2007.

Among individual builder stocks, DR Horton NYSE:DHI 20.08, +0.39) and Pulte Group NYSE:PHM 18.61, +0.57 rose by 2.0% and 3.2%, respectively.

US Major Market Indexes Technical Analysis
Date Symbol Price Technical Analysis Support Resistance
18 Dec 2012 QQQ 66.37 Neutral (0.13) 66.26 67.25
18 Dec 2012 DIA 133.18 Neutral (0.17) 133.13 133.90
18 Dec 2012 SPY 145.09 Neutral (0.23) 143.51 146.20

The major European averages ended the day on a positive note. France’s CAC gained 0.3%, United Kingdom’s FTSE rose by 0.4%, and Germany’s DAX advanced 0.6%.

Wednesday morning, FedEx NYSE:FDX 92.36, +1.34), General Mills NYSE:GIS 41.77, +0.04, and Navistar NYSE:NAV 22.85, +0.93 are all scheduled to report. Note, the consensus expects economic bellwether FedEx to announce earnings of 1.41 on $10.82-B in revenue.
The current US account deficit for Q-3 totaled $107.5-B, which was wider than the $104.2-B deficit that had been broadly anticipated. This marks an improvement from Q-2s $118.1-B deficit.

Looking at Wednesdays economic data, the weekly MBA Mortgage Index will be reported at 7:00 a EST. In addition, November housing starts and building permits will both be released at 8:30a EST.

The U.S. Treasury will auction off $29-B in 7-yr Notes.