Why the Dow Jumped 166 Points

Finally. Politicians stopped twiddling their thumbs and made some tangible progress in the fiscal cliff talks, sparking a day-long rally on Monday. Although a final deal looks unlikely by midnight, lawmakers agreed on all tax-related issues, one of the larger political challenges in the whole process.

Despite the agreement, mistletoe was conspicuously absent in the negotiations. The Dow Jones Industrial Average (INDEX: ^DJI) added 166 points, or 1.3%, to close at 13,104. The index gained 7.3% this year.

Now, we all know that corporations -- certain tax laws aside -- aren't actually people. But if Bank of America (NYS: BAC) were an actual person, it would be laughing maniacally at the Dow's "pitiful" 7.3% advance. While drawing on a cigar rolled with $100 bills, it would say, "That's nothin'," with a Grinch-like grin on its face. It would be saying this because, after gaining 108% this year, it easily outperformed all its Dow peers.

Alas, if poor Hewlett-Packard (NYS: HPQ) were a person, it would be weeping in a corner somewhere. Today, Mr. Market would bring it a tissue. "There, there," he would say. "Here's 4.2%. You can be the best stock in the Dow -- today." Blowing its nose, HP would briefly feel better. Then it would break down again, remembering its 44% stumble in 2012. The pending government investigation into HP's Autonomy acquisition would cause Mr. Market to have to "go to the bathroom," leaving HP alone to wallow in its self-pity.

Nutritional supplement maker Herbalife (NYS: HLF) , not invited to the Dow's holiday party, would instead throw one of its own. Supreme self-confidence, causing people to temporarily forget how much of a loser it was earlier this year, would convince some that it got a bad rap; the stock surged 12% today, closing down 35% for the year.

Later, someone will remember that Herbalife could be a pyramid scheme.

Wall Street remained bearish on Questcor Pharmaceuticals (NAS: QCOR) today, which fell 0.8% to close 2012 down 34%. Questcor is reeling from a PR fallout after the company appeared on the front page of The New York Times Sunday Business section yesterday. The critical expose chewed out the company for a sudden, dramatic increase in the price of a drug called Acthar, which skyrocketed from $1,650 a vial to more than $23,000 in 2007. The Times also questioned the efficacy of Acthar and the level of research done by Questcor before bringing it to market.

The article Why the Dow Jumped 166 Points originally appeared on Fool.com.

John Divine has the following options: long JAN 2013 $10.00 calls on Bank of America. You can follow him on Twitter @divinebizkid and on Motley Fool CAPS @TMFDivine.The Motley Fool owns shares of Bank of America. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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