New York Report: Wall St soars as Washington nears debt deal

US stocks closed more than one per cent higher yesterday after Senate leaders said they had a deal to reopen the federal government and raise the debt ceiling, which would avoid the threat of a debt default.

US Senate majority leader Harry Reid and Senate republican leader Mitch McConnell said senators had come to an agreement that will reopen the government through 15 January and raise the debt ceiling until 7 February. The House of Representatives planned to vote on the measure later in the day.

The day’s gains brought the S&P 500 within a few points of its all-time closing high of 1,725.52 on 18 September. Volume has been below average, however, as many investors stayed on the sidelines until a resolution of the fiscal issues was official. About 78 per cent of stocks traded on the New York Stock Exchange ended higher while 69 per cent of Nasdaq-listed shares closed up.

After the market closed, IBM reported earnings that beat expectations but revenue below consensus, sending shares down 6 percent to $175.56. Online auction site eBay Inc fell 4.5 percent to $51.10 after a disappointing sales forecast for the holiday season.

American Express reported a 9.3 per cent rise in earnings after the bell yesterday, but shares were flat in extended trading.

The Dow Jones industrial average was up 205.82 points, or 1.36 per cent, at 15,373.83. The Standard & Poor’s 500 Index was up 23.48 points, or 1.38 per cent, at 1,721.54. The Nasdaq Composite Index was up 45.42 points, or 1.20 per cent, at 3,839.43.