Stocks End Higher on Budget Talks Stocks on Wall Street closed higher on Friday after congressional leaders said their meeting with President Obama about the coming government spending cuts was constructive. The Standard & Poor's 500-stock index added 0.5 percent for the day, the Dow Jones industrial average was 0.4 percent higher, and the Nasdaq composite index gained 0.6 percent. Investors have been concerned that if no deal was reached on the large, automatic budget cuts and tax increases set to begin next year, the economy could slip into recession. The S.&P. 500 is down 4.3 percent over the past two weeks. "I have to believe the government will come to some kind of resolution, but every day that passes without any progress is another day where the path of least resistance will be down," said Robert Pavlik, chief market strategist at Banyan Partners in New York. While the S.&P. 500 remained up 8 percent for the year, what had looked like a stellar 2012 for stocks has turned into merely an average year. Though some investors have become more inclined to protect their gains as 2012 draws to a close, others view the decline as a buying opportunity. "I think we're closer to the end of this decline than to the beginning, and valuations are becoming extremely attractive," Mr. Pavlik said. If you're not putting a buying list together, you're doing yourself a disservice. The 10-year United States Treasury bond fell to yield 1.577 percent, down 1.5 points. A flare-up in violence in the Middle East added to market unease as Israeli warplanes bombed targets in and around Gaza city for a second day, while two rockets fired from the Gaza Strip targeted Tel Aviv. In Europe, stocks closed down, with British and German stocks off 1.3 percent.