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8B Daily News ��� Tuesday, January 1, 2013 Stocks shoot up as investors bet on ���cliff��� deal NEW YORK (AP) ��� The stock market shot higher on Monday even as the ������fiscal cliff������ neared. By the time trading ended, Republicans and Democrats still hadn���t reached a budget compromise ��� but investors were betting that they would. It was a dramatic day on what turned out to be a strong year for stocks. The Standard & Poor���s 500 index rose 13.4 percent for the year, after finishing flat in 2011. It was the index���s best year since 2009, and it came despite overhanging problems like Europe���s debt crisis and anemic U.S. growth, bringing U.S. indexes close to their highs reached before the 2008 financial crisis. Including dividends, the gain for the S&P 500 was even higher ��� 16 Wall Street percent. The close Monday was a high note in what had been a choppy day for the market, as choppy as the ������fiscal cliff������ dealmaking that has been yanking it around. It also marked a turnaround after five straight days of ������cliff������-influenced losses. The Dow Jones industrial average and the Standard & Poor���s 500 both climbed more than 1 percent. The Nasdaq composite index rose 2 percent. Stocks fell at the opening of trading Monday and struggled for direction throughout the morning. The indecisiveness overlaid a day of dramatic budget negotiations in Washington, where lawmakers were trying to hammer out a new budget deal to avert the ������fiscal cliff.������ That refers to automatic tax increases and government spending cuts that will kick in without a budget deal. Stocks jerked higher at midday following reports that the bare outline of a deal to avoid the ������cliff������ had been knit together. The gains faded after President Barack Obama said in the early afternoon that a compromise was ������within sight,������ but not finalized. Then, in the late afternoon, the indexes shot higher again. Congressional Republicans and the Democratic White House said they had agreed on some measures, but still had no final deal in hand. At the close of trading, Dow Jones industrial average was up 166.03 points, finishing the year at 13,104.14. That���s a gain of 7.3 percent for the year, its fourth straight year of gains. The S&P 500 rose 23.76 to 1,426.19. The Nasdaq composite climbed 59.20 to 3,019.51. For the year the Nasdaq rose 15.9 percent. With the ������fiscal cliff������ still closing in, investors��� opinions about its potential impact varied, making its long-term effect Established 2004 on the market hard to guess. Some investors are unruffled. They think that even if the U.S. does go over the ������cliff,������ it would be more akin to the anticlimactic Y2K scare than a true Armageddon. The ������cliff���s������ impact would be felt only gradually, they reason. For example, workers might get more taxes withheld from their first couple of paychecks Ralph���s Tax Service New location at 855 Walnut St. Suite 2 Red Bluff, CA P. Ralph Cambell, E.A. (530) 529-9540 over 40 years experience See us for all of your Income Tax, Bookkeeping, Payroll and Financial Service needs. GreenWaste of Tehama REMINDER Holiday Tree Collection NOW through January 18th Holiday trees may be dropped off at dumpsters at the following locations: 1. Cedar St. / Jackson St. 2. Fairgrounds front parking lot, Antelope Blvd. 3. Kimball Rd, by the city yard. No ornaments, stands, tinsel or flocked trees will be collected. For more information please contact our Customer Service Department at 530-528-8500 or 800-443-6924. in the new year, but it���s not as if they���d have to pay all their higher taxes up front on Tuesday. And Congress could always retroactively repeal those higher taxes. Others are more concerned. The higher taxes and lower government spending could take more than $600 billion out of the U.S. economy and send it back into recession. Investors would have no good read on the country���s long-term policy for taxes and spending. The psychological impact ��� the U.S. would essentially be broadcasting that its lawmakers can���t compromise ��� would also hurt. ������We���re having a fragile recovery, with the pain of 2008 still fresh on everybody���s mind,������ said Joe Heider, principal at Rehmann Group outside Cleveland. ������It���s fear of the unknown. 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