U.S. Markets closed

Stocks higher on hopes for a deal to avoid 'cliff'

FILE - In this Nov. 7, 2012, file photo, James Dresch of MND Partners Inc. works on the floor of the New York Stock Exchange in New York. Stocks declined for a third day on Wall Street Wednesday, Nov. 28, 2012, as investors waited for signs of progress on the "fiscal cliff." (AP Photo/Henny Ray Abrams, File)

NEW YORK (AP) -- Stocks are closing higher on signs that lawmakers are edging toward a deal that would help the U.S. avoid a fiscal crisis at the end of the year.

The Dow Jones industrial average gained 107 points to end at 12,985 Wednesday. It had been down as much as 112 points.

The Standard and Poor's 500 rose 11 points to 1,410. The Nasdaq composite rose 24 points to 2,992.

Huge tax increases and spending cuts will come into effect Jan. 1 if no deal on the U.S. budget is reached. President Barack Obama said he believed that both parties can reach a framework on a deal before Christmas.

Rising stocks outnumbered falling ones two-to-one on the New York Stock Exchange. Volume was lighter than average at 3.3 billion shares.