YAHOO [BRIEFING.COM]: The S&P 500 welcomed the New Year with a 2.5% rally after the United States Congress approved measures to avoid the fiscal cliff. According to the budget agreement, individuals earning below $400,000 will see an extension of their recent tax rates while those earning above $400,000 will see their top rate rise to 39.6%. However, the payroll tax will revert back to 6.2% from 4.2%, and the increase will affect most workers. Finally, the $109 billion sequester has been delayed for two months. The focus will now turn to raising the debt ceiling as another lengthy debate is likely to follow.

Technology stocks were among today's top performers, and the SPDR Technology Select Sector ETF (XLK 29.81, +0.96) settled higher by 3.3%. Apple (AAPL 549.03, +16.86) added 3.2% as the largest tech company traded in-line with the remainder of the sector.

Elsewhere, semiconductor manufacturers outperformed the broader market and the PHLX Semiconductor Average rose by 4.1%. All 30 names which comprise the complex advanced, and today's strength lifted the average to its best level since late September. Among individual producers, Taiwan Semiconductor (TSM 18.10, +0.94) and Veeco Instruments (VECO 31.17, +1.68) both gained near 5.5%.

As expected, financials saw broad strength after Congress passed a budget package to avoid the fiscal cliff. The SPDR Financial Select Sector ETF (XLF 16.86, +0.48) settled higher by 2.9%, and was among the top performing sector ETFs. Among the majors, Citigroup (C 41.25, +1.69) surged 4.3%, and outperformed its peers.

The materials sector was also a notable beneficiary of the market rally, and the SPDR Materials Select Sector ETF (XLB 38.48, +0.94) gained 2.5%. The strength resulted from yesterday's budget pact as well as recent Chinese economic data, which has allayed some fears regarding a possible slowdown in the Middle Kingdom. An increase in the country's economic activity would bode well for materials demand—especially steel. As such, steelmakers outperformed the sector. Mechel Steel (MTL 7.33, +0.40) and United States Steel (X 25.89, +2.04) saw respective gains of 5.9% and 8.6%.

Despite the market-wide rally, retailers lagged ahead of tomorrow's December same store sales reports. Early indications have suggested consumers showed more caution with regards to their spending habits during the recent holiday season. As such, the SPDR S&P Retail ETF (XRT 62.85, +0.47) added 0.8% after being up as much as 2.2% at the open. Among individual retailers, Kohl's (KSS 42.21, -0.77) and Macy's (M 38.31, -0.71) lost 1.8% each. Earlier, Buckingham downgraded Kohl's to ‘Neutral' from ‘Buy.' Elsewhere, American Eagle Outfitters (AEO 20.08, -0.43) slipped 2.1% after Jefferies downgraded the stock to ‘Hold' from ‘Buy.'

In M&A news, Zipcar (ZIP 12.18, +3.94) soared 47.8% after the company agreed to be acquired by Avis Budget Group (CAR 20.77, +0.95) for $12.25 per share. The total transaction value is estimated at $500 million and the purchase price represents a 49.0% premium to Zipcar's December 31 close. Following the acquisition announcement, Avis reaffirmed its full-year 2012 earnings and revenue guidance.

Today's market-wide rally pushed the volatility index, or VIX, down to 14.74. Last week, the VIX crossed above 20.00 for the first time since late July. As uncertainty surrounded the budget debate, investors had bid up near-term downside protection, which was reflected by an uptick in the volatility measure. With the uncertainty removed from the immediate term, the VIX plunged nearly 20.0% to levels last seen in late November.

The December ISM Index was reported at 50.7, while the Briefing.com consensus expected the reading to come in at 50.5, ahead of November's reading of 49.5. Meanwhile, November construction spending decreased by 0.3% month-over-month, against the expected increase of 0.5%.

Crude oil rose along with the equities market following news that the U.S. Congress reached a deal yesterday, thus averting going over the "fiscal cliff". The energy component brushed a session high of $93.87 per barrel moments after pit trade opened but retreated slightly as the session went on. It eventually closed at $93.10 per barrel, or 1.4% higher.

Precious metals also traded higher today. Gold advanced to a pit session high of $1695.40 per ounce but pulled-back as the dollar index recovered into positive territory. It eventually settled 0.7% higher at $1688.20 per ounce. Silver traded up as high as $31.53 per ounce in morning floor action and settled with a 2.4% gain at $30.99 per ounce.

Natural gas, on the other hand, extended its losses as it fell to a session low of $3.18 per MMBtu on forecasts calling for above-average temperatures across the nation. It managed to inch slightly higher as it headed into the close and settled at $3.23 per MMBtu, or 3.6% lower.

In tomorrow's economic data, the weekly MBA Mortgage Index and December Challenger Job Cuts will be reported at 7:00 ET and 7:30 ET respectively. December ADP Employment Change will be released at 8:15 ET. Weekly initial and continuing claims will be announced at 8:30 ET and the Federal Reserve will release the minutes from its December 12 policy meeting at 14:00 ET. Lastly, automakers will be reporting their sales throughout the day.DJ30 +308.41 NASDAQ +92.75 SP500 +36.23 NASDAQ Adv/Vol/Dec 2206/2.05 bln/337 NYSE Adv/Vol/Dec 2840/859.1 mln/280