Stocks end higher after fiscal cliff report

• Investors are cautious as fiscal cliff talks continue
• Stocks were lower earlier Friday
• Dell and J.M. Smucker were hit after disappointing earnings reports

NEW YORK (AP) — Stocks rose for the first day in four after Congressional leaders said they were confident they can reach a deal with President Obama to head off the "fiscal cliff" and the risk of a new recession.

The Down Jones industrial average ended up 0.4% for the day, a gain of 46 points to 12,588.

Investor concern that Obama and Congress won't reach a deal on how to cut the budget deficit has caused a sell-off in stocks since Election Day. The Dow is down 5% since Nov. 6. If an agreement isn't made, automatic government spending cuts and tax increases are set to kick in at the beginning of next year.

The market started lower Friday but spiked higher shortly before midday as the top members of the House and Senate spoke at the White House following a closed-door session with Obama.

"It's a good start . . . the fact that they were all standing together," said Ben Schwartz, the chief market strategist at Lightspeed Financial, a New York-based broker.

House Speaker John Boehner and Senate Minority Leader Mitch McConnell both said they offered higher tax revenue as part of a deal. Boehner said he outlined a framework that is consistent with Obama's call for a "balanced" approach of both higher revenue and spending cuts.

Stocks have fallen since the Presidential election last week, when voters returned President Barack Obama and a divided Congress to power. Concern that political wrangling will stop lawmakers from reaching a deal on reducing the budget deficit has prompted the selling.

Superstorm Sandy depressed U.S. industrial output in October, while production of machinery and equipment declined sharply, reflecting a more cautious outlook among businesses, according to a Federal Reserve report.

The Fed says industrial output fell 0.4% last month, after a 0.2% gain in September. Excluding the storm's impact, production at the nation's factories, mines and utilities would have been up about 0.6%.

Among stocks making big moves:

—Dell fell 72 cents to $8.84 after saying that its revenue may fall as much as 13% in the fourth quarter.

—Schiff Nutrition International, a nutritional supplement company, jumped $9.84 to $43.76 after U.K.-based Reckitt Benckiser Group offered to pay $42 a share in cash to buy the company.

— Ruckus Wireless, a maker of wireless networking equipment, nosedived $2.75 to $12.25 on its first day of trading. That's a decline of 18.3%.

— Sears fell $11 even to $47.48 after the company said sales at both its Kmart and Sears stores continued to tumble.

European stocks ended mostly lower. Britain's FTSE 100 fell 1.27%. Germany's DAX was down 1.32%. France's CAC-40 was basically down 1.21%.

Trading in Asia was slightly more energetic. Hong Kong's Hang Seng rose 0.2% to 21,159.01. South Korea's Kospi fell 0.5% to 1,860.83. Australia's S&P/ASX 200 lost 0.3% to 4,336.80.

Benchmarks in Taiwan, New Zealand and mainland China fell. The Shanghai Composite Index lost 0.8% to 2,014.72 and the Shenzhen Composite Index fell 0.7% to 800.20. Benchmarks in Singapore, Thailand and the Philippines rose.

Japan's Nikkei 225 stock index jumped 2.2% to close at 9,024.16, rallying for a second straight day on expectations that the opposition Liberal Democratic Party may win elections next month and pursue more aggressive stimulus policies than the current leadership.

LDP leader Shinzo Abe has said he is determined to push for such policies and to find ways to weaken the yen, whose strength against other currencies has hammered exporters.

Stan Shamu, strategist at IG Markets in Melbourne, said Abe wants an inflation target of between 2 and 3% as a way to cheapen the Japanese currency, perhaps by printing yen or bulking up on purchases of assets like Japanese government bonds. Still, the target might be difficult to achieve, given the economy's weakness, he said.

"With such a big export economy, the yen has massive significance on how the local economy performs," Shamu said.

Japan's exporters, whose fortunes are linked to the yen's valuation, were buoyed by the prospect of a changing of the guard. Mazda Motor soared 7.1%. Nissan Motor jumped 5.1%. Nikon surged 7.2% and Canon gained 5.8%.

In Australia, Whitehaven Coal fell 1.8% after announcing it would scale back some operations due to the decline in global coal prices.

Benchmark oil for December delivery was up $1.05 to $86.50 in electronic trading on the New York Mercantile Exchange. The contract fell 87 cents to close at $85.45 a barrel in New York on Thursday.

In currencies, the euro fell to $1.2740 from $1.2773.