Obama's Tax Talk Gives Market Extra Boost: Analysts

Stocks got a boost on Thursday after President Obama said he is open to extending the Bush-era tax cuts across all income levels. Kevin Caron, market strategist at Stifel Nicolaus, and Chief Investment Officer David Kotok of Cumberland Advisors, both see the news helping stocks add on to recent gains.

"I don't think [news on Obama's tax discussion] is fully priced in," Kotok said.

"The tax is an increase in optimism ... Even my 96 year-old Aunt Pearl is optimistic."

The Dow Jones Industrial Average moved up nearly 200 points Thursday, after hitting a 2-year high in the prior session. The S&P 500 Index and the Nasdaq each advanced more than 1 percent.

"We now have a trifecta," Kotok added. "Quantitative easing, we've got the election outcome, and we've got the tax cuts in play. The question is for how long."

Both Caron and Kotok see the S&P's upside potential around the 1,250 mark.

'Stability Wins Out'

Caron cites the strong brands and consistency in consumer staples stocks driving the market to that point.

"The economy is going to continue to struggle into next year because of the overall level of indebtedness in the economy," Caron said. "If you don't get the rebound in the economy that is expected [from the quantitative easing], you'll be in for disappointment...so stability wins out."

Kotok points to the transportation sector that will gain on lower labor cost pressures and muted inflation, despite rising oil prices.

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No immediate information was available for Caron, Kotok or their firms.