Stocks Rally as Fiscal Cliff Fever Breaks: Will Bounce Have Legs?

Stocks Rally as Fiscal Cliff Fever Breaks: Will Bounce Have Legs? Daily Ticker The markets are higher in 2012, but it hasn't been easy. After a torrid start to the year, stocks gave back nearly all of a double-digit gain in two months, bottoming in early June. History repeated almost immediately, with stocks pushing higher into October only to then slide more than 6%. Despite the sizable up-and-down action, Hugh Johnson, the eponymous head of the advisory firm, remains positive -- with a qualifier. Describing his footing as "positive, but don't bet the ranch," Johnson thinks the rate cycle still favors equities. However, he worries that a fiscal cliff-driven recession would be an enormous headwind for stocks. The growth rate for the economy has slowed to the point of being barely discernible, and earnings are doing much the same thing. For 2013, it may well be a repeat performance. The Dow was up 165 points in afternoon trade Monday while the S&P and the Nasdaq were each up over 1.5% in a rally largely attributed to hopes for a deal to avoid the fiscal cliff. But not all are convinced of the rally's staying power.