* Congressional leaders vow to find common ground
* Dell shares decline as profit slumps
* Penn National rises sharply in strong volume
* Indexes up: Dow 0.4 pct, S&P 0.5 pct, Nasdaq 0.6 pct
By Leah Schnurr
NEW YORK, Nov 16 (Reuters) - Hope that U.S. politicians
would find common ground to steer clear of the "fiscal cliff"
boosted stocks on Friday, though the gains were not enough to
offset the week's losses.
Stocks recovered from early declines after leaders of the
Senate and House emerged from a meeting at the White House and
indicated they would be flexible in efforts to settle fiscal
Democrats said they recognized the need to curb spending and
Republicans said they had agreed to put "revenue on the table"
following a meeting with President Barack Obama.
For the week, the S&P was down 1.5 percent, its second week
in a row of losses. The Dow lost 1.8 percent, down for the
fourth straight week, while the Nasdaq was lower for the sixth
week, also losing 1.8 percent.
"These are very small steps in the right direction," said
Kate Warne, investment strategist at Edward Jones in St Louis.
"The more evidence there is that Congress will make a
decision sooner, the more likely we are to see stocks rebound."
About $600 billion of automatic budget cuts and tax
increases will start to take effect in the new year unless
Washington reaches a deal. With memories of 2011's debt ceiling
impasse fresh in investors' minds, many are worried this year's
discussions could be drawn out or yield no agreement.
If all the changes go into effect, economists say it could
tip the economy into recession. Investors have pulled out of
stocks over the past two weeks, taking nearly 4 percent off the
The Dow Jones industrial average added 45.93 points,
or 0.37 percent, to 12,588.31. The Standard & Poor's 500 Index
rose 6.55 points, or 0.48 percent, to 1,359.88. The
Nasdaq Composite Index gained 16.19 points, or 0.57
percent, to 2,853.13.
Shares of Penn National Gaming Inc surged 28.2
percent to $48.23 on its busiest day of trading in more than
four years, after the owner of gaming and pari-mutuel properties
said late Thursday it will split its business into a
gaming-focused real estate investment trust and a gaming
More than 10 million shares changed hands, compared with
average daily volume of 629,000 shares over the past 50 days.
Dell Inc helped limit the Nasdaq's gains after
lower PC sales hurt the company's profit. Dell slumped 7.3
percent to $8.86.
More violence in the Middle East also kept investors wary
after Palestinian militants nearly hit Jerusalem with a rocket
for the first time in decades and fired at Tel Aviv for a second
Sears Holdings Corp late Thursday reported a
quarterly loss that was narrower than expected, but same-store
sales fell on weak demand for electronics, sending shares down
18.8 percent to $47.49.
Volume is expected to be light next week with some investors
away for the Thanksgiving holiday, and the market closed on
Thursday and open for only a half-day on Friday.
The decreased liquidity could spell more intra-day
volatility for the market, though fewer market participants
could also mute action.
Volume on Friday was roughly 7.52 billion shares on the New
York Stock Exchange, the Nasdaq and the NYSE MKT, well above the
year-to-date average daily closing volume of about 6.52 billion.
Advancers outnumbered decliners on the NYSE by 2,258 to 784
on the New York Stock Exchange. On the Nasdaq, advancers also
had the upper hand by 1,446 to 997.