U.S. lawmakers kept things exciting right up until the closing bell, as rumors of an eleventh-hour bipartisan alternative to a fiscal-cliff swan dive buoyed stocks in afternoon trading and sent the Dow Jones Industrial Average (DJI) back on the north side of 13,000. "After a bleak start, the day saw a grind higher as hopes continued to mount that the fiscal cliff would be averted by a last-minute deal," noted Schaeffer's Senior Options Strategist Tony Venosa. "It was great to see a broad-based rally, with all major sectors and industries closing in the black."

Continue reading for more on today's market, including:

• Some simple tips to remember as you prepare your portfolio for 2013.
• A bullish play on International Business Machines (NYSE:IBM).
• Schaeffer's contributor Adam Warner reviews how the CBOE Market Volatility Index (VIX) waited until the waning days of 2012 to explode higher.

• A fiscal-cliff compromise (?), a long-term play on Zynga (NASDAQ:ZNGA), and our Tweet of the day, which offers a bit of optimism as we approach the end of 2012.

The Dow Jones Industrial Average (DJI) traded in a 225-point range on the final day of the year, as fiscal-cliff gloom turned to hope in the early afternoon, allowing the blue-chip average to emerge from below the 13,000 level and close just shy of its intraday peak. By the end of the session, the Dow was up 166 points, or 1.3%. The Dow ended December with a gain of 0.6% but surrendered 2.5% for the quarter. In 2012, the average was up 7.3%.

Seeing similar intraday reversals, the S&P 500 Index (SPX) jumped 24 points, or 1.7%, while the Nasdaq Composite (COMP) added 59 points, or 2%. The SPX gained 0.7% for the month, lost 1% in the fourth quarter, and ended 2012 up 13.4%. The COMP's corresponding moves were 0.3%, negative 3.1%, and 15.9%, respectively.

The CBOE Market Volatility Index (VIX) took it on the chin as the fiscal-cliff situation neared resolution -- one way or another. By the close, the VIX had dropped 20.7%, or 4.7 points, to breach its 10-day moving average. Although the VIX added 13.5% in December and 14.6% in the quarter, it lost 23% in 2012.

3 Things to Know About Today's Market:

• With the nation teetering on the edge of the fiscal cliff, party leaders continued to debate potential solutions through the final day of the year. Speaking at 1:30 p.m. Eastern, President Barack Obama was optimistic, saying a deal was "within sight," while acknowledging there were issues left to be resolved. The rumored budget deal being forged between Senate Republicans and the White House (represented by Senate Minority Leader Mitch McConnell, R. Ky., and Vice President Joe Biden, respectively) would lift taxes for households making more than $450,000 annually. Taxes on inheritance income and capital gains would also be increased. While any deal hinges on approval from the House, the chamber has until noon on Thursday (when the new class is sworn in) to vote on the measure.
• Retail Metrics again pared estimates for same-store sales in December to show an increase of 1.9%. Since the start of the month, the average analyst estimate has dropped 0.6 percentage point from the initial growth estimate of 2.5%. An increase of 1.9% would be the worst retail-sector performance in December since 2008. This adjustment does not bode terribly well for December same-store sales, which some retailers will be reporting on Thursday.
• Most broader European measures closed in positive territory for the year, led by the Athens Composite Index, which settled the year 33% higher. In second place was the German DAX, up 28% over the past 12 months. The French CAC 40 index gained 15% for the year, while the London FTSE 100 index advanced by 5.8%. Bringing up the rear in the region was Spain's IBEX 35, which declined roughly 6% in 2012.

Plus ... the parent of the Los Angeles Times and the Chicago Tribune emerged from Chapter 11 bankruptcy, following four years of reorganization efforts. Tribune Company now owns 23 television stations and eight daily newspapers, but plans on selling most or all of the latter in order to focus on broadcast operations such as WGN America. Peter Liguori, who formerly served as chief operating officer for Discovery Communications (NASDAQ:DISCK), is expected to be named the firm's new CEO.

Today's Top Tweet:

"If 2013 is a book yet to be written then tomorrow is the first blank page. Let's get to work."
@crosshairtrader, (David Blair), 12:01 p.m.

5 Stocks We Were Watching Today:

1. Long-term Zynga (NASDAQ:ZNGA) speculators are hoping for limited downside.
2. Facebook Inc (NASDAQ:FB) enjoyed two brokerage upgrades this morning.
3. Large-scale call buyers in Ford Motor (NYSE:F) hit the exits.
4. General Motors (NYSE:GM) zoomed to a new annual high.
5. McDonald's Corporation (NYSE:MCD) captured the attention of short-term call buyers, who expect modest upside through week's end.

Question of the Day:

Q: What were the best-performing stocks in 2012?
A: In this week's edition of Monday Morning Outlook, our Senior Quantitative Analyst Rocky White surveyed all stocks for notable action (to qualify, stocks had to be trading north of $5 at the beginning of the year and relatively active, with average daily volume of at least 1 million shares). Topping the charts as of Friday afternoon was 3D Systems (NYSE:DDD), up 251%. Next were Affymax (NASDAQ:AFFY) and homebuilder PulteGroup (NYSE:PHM), which each gained roughly 180% over the course of the calendar year.

For a look at today's options movers and commodities activity, head to page 2.