Optimism that a budget deal will be reached — and the fiscal cliff avoided — sent stocks higher. Also, the Commerce Department raised its estimate for growth to an annual rate of 2.7% in the July-September period, and the Labor Department said the number of people applying for jobless benefits fell to 393,000 last week, the second straight drop since Superstorm Sandy drove applications higher. Investors have been closely monitoring the negotiations in Washington. ‘It’s a headline-watching market with this fiscal cliff,’ said David Brown, chief strategist at Sabrient. He said the talks are likely to cause twists and turns for weeks.