The stock market jumped on Tuesday as the so-called "Santa Claus rally" -- the historic market trend where stocks tend to rise the week before Christmas -- came to pass. The Dow Jones Industrial Average climbed better than 115 points to close at 13,351. The widely watched blue-chip index traded in a range between 13,232 and 13,366.
The SPDR S&P 500 ETF (NYSE:SPY) added 1.11 percent to $145.36. Volume was heavier than normal with around 145.5 million SPY shares trading hands on the day compared to a 3-month daily average of 134 million.
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The PowerShares QQQ Trust ETF (NASDAQ:QQQ), which tracks the performance of the Nasdaq 100, surged 1.56 percent to $66.57. The ETF's largest component, Apple (NASDAQ:AAPL), retraced some of its recent losses by climbing a little less than three percent to $533.81.
Crude oil followed the stock market higher as optimism about a potential fiscal cliff deal fueled risk appetite. At last check, NYMEX crude oil futures, the U.S. benchmark, were up 0.91 percent to $87.99 in the electronic session. Brent crude futures had added 1.20 percent to $108.93. In ETF trading, the United States Oil Fund ETF (NYSE:USO) rose 0.53 percent and closed the equity session at $32.18.
Talk of a potential budget deal drove the price of precious metals lower on the day. COMEX gold futures shed 1.42 percent to $1,674.10 while silver futures were last down 1.77 percent to $31.71. The heavily traded SPDR Gold Trust ETF (NYSE:GLD) fell 1.46 percent and closed at $162.06.
Long-term Treasuries fell on the session as money moved out of bonds and into equities. The iShares Barclays 20+ Year Treasury Bond ETF (NYSE:TLT) lost 1.03 percent to $120.49. The yield on the 10-Year Note rose five basis points to 1.83 percent.
The U.S. dollar was also lower on the day, which helped risk appetite. The PowerShares DB US Dollar Index Bullish ETF (NYSE:UUP), which tracks the performance of the greenback versus a basket of foreign currencies, lost 0.32 percent to close the equity session at $21.68. The closely watched EUR/USD pair was last trading at $1.3219, a gain of 0.45 percent.
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