Today in business: 5 things you need to know

1. STOCKS RISE SHARPLY AFTER CONGRESS AVERTS FISCAL CLIFF

Markets shot higher around the world on Wednesday, the first trading day of 2013, after Congress passed a deal to avoid the fiscal cliff. Hours after the GOP-led House approved the agreement to preserve income-tax breaks for all Americans except those in households making more than $450,000 a year, the Dow Jones Industrial Average was up 2 percent (more than 200 points). "Many investors are feeling confident heading into 2013 following a year of strong equity market returns, and the recently signed deal," said UBS strategist Jonathan Golub. [Reuters]

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2. ZIPCAR SHARES JUMP AFTER AVIS ANNOUNCES PURCHASE

Zipcar shares soared early Wednesday by 48 percent after the Avis Budget Group announced that it had agreed to buy the car-sharing pioneer for $500 million. With its $12.25-per-share cash offer, Avis is paying a 49 percent premium over Zipcar's stock price at the close of 2012, a sign that Avis sees a big future for Zipcar's strategy of letting its 760,000 members rent vehicles by the hour or by the day. Several major competitors, including rival Hertz, already offer similar options. "We see car sharing as highly complementary to traditional car rental, with rapid growth potential," Ronald L. Nelson, Avis' chief executive, said in a statement. [USA Today, New York Times]

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3. APPLE REPORTEDLY STARTS TESTING IPHONE 6

Apple customers are still getting used to their brand new iPhone 5s, but the smartphone and tablet maker is reportedly already testing the next generation of the wildly popular gadget, according to The Next Web. App developers spotted evidence in app usage logs traced to Apple's Cupertino, Calif., campus, suggesting that the company is working on both a new iPhone and a new version of the iOS operating software. "No specifics on hardware or software features are shared in developer logs," says Matt Brian at The Next Web, "but sources have indicated that Apple began working on the new version of iOS 7 towards the end of 2012 and is soon to finalize the features that will be included in its first public release." [The Next Web]

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4. U.S. FACTORIES PICK UP SPEED

Manufacturing bounced back slightly in December after declining unexpectedly the month before, the Institute for Supply Management reported Wednesday. The index of raw-material purchases at U.S. factories — a key gauge of how busy they are and how fast the economy is growing — hit 50.7, narrowly higher than economists polled by Reuters expected and a clear improvement over November's number of 49.5, a 40-month low. Still, manufacturing activity is far slower than it was in January 2012 (when the index hit 54.1), signaling that American factories are still struggling. Eurozone manufacturing output is contracting, suggesting the region's recession is deepening heading into 2013. [MarketWatch]

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5. U.S. AUTOMAKERS CONTINUE HISTORIC HOT STREAK

U.S. sales of cars and light trucks appear to have risen in December by nearly 10 percent, capping the third straight double-digit annual gain — the best streak the industry has seen since 1973. The expected total for 2012 — 14.5 million — would be the best since 2007. The three-year run came as Americans replaced vehicles that are, on average, the oldest in the nation's history. " It sure feels a lot better to be selling cars today than a few years ago," says Geoffrey Pohanka, president of the Pohanka Automotive Group. "The age of the fleet and the attractiveness of a lot of cars that are being designed now are going to help sustain sales going forward." [Bloomberg News]