Investing.com - U.S. stocks rallied on Wednesday after leadership in the U.S. Senate agreed on budget terms needed to reopen the government and give the Treasury Department authority to borrow and thereby avoid defaulting on its obligations.
At the close of U.S. trading, the Dow Jones Industrial Average finished up 1.36%, the S&P 500 index rose 1.38%, while the Nasdaq Composite index rose 1.20%.
Senate Majority Leader Harry Reid, a Democrat, and the Senate's top Republican, Mitch McConnell, said earlier they agreed on a plan to end the fiscal impasse needed to reopen the government as well as extend Washington's borrowing authority to avoid defaults.
The budget deal will reportedly give the Treasury the authority to continue borrowing through Feb. 7 and fund the government through Jan. 15, but will also add in spending cuts, which appeased Republicans.
The Senate is expect to approve the deal later today followed by the House of Representatives afterwards.
House Speaker John Boehner said earlier the House would not block the compromise.
U.S. credit ratings agency Fitch Ratings on Tuesday placed the U.S. 'AAA' debt on "rating watch negative" due to congressional inability to pass a spending package.
Elsewhere, the Federal Reserve reported in its Beige Book, which analyzes current economic conditions, that the U.S. economy expanded at a modest to moderate pace from September into October, though the U.S. central bank said fiscal uncertainty had been dampening recovery.
Leading Dow Jones Industrial Average performers included JPMorgan Chase, up 3.25%, Goldman Sachs, up 2.93%, and Visa, up 2.15%.
The Dow Jones Industrial Average's worst performers included Cisco, down 0.80%, Home Depot, down 0.32%, and Walt Disney, down 0.15%.
European indices, meanwhile, finished largely higher.
After the close of European trade, the EURO STOXX 50 rose 0.33%, France's CAC 40 fell 0.29%, while Germany's DAX 30 gained 0.47%. Meanwhile, in the U.K. the FTSE 100 finished up 0.34%.
On Thursday, the U.S. is to publish the weekly government report on initial jobless claims, as well as data on manufacturing activity from the Philly Fed.
At the close of U.S. trading, the Dow Jones Industrial Average finished up 1.36%, the S&P 500 index rose 1.38%, while the Nasdaq Composite index rose 1.20%.
Senate Majority Leader Harry Reid, a Democrat, and the Senate's top Republican, Mitch McConnell, said earlier they agreed on a plan to end the fiscal impasse needed to reopen the government as well as extend Washington's borrowing authority to avoid defaults.
The budget deal will reportedly give the Treasury the authority to continue borrowing through Feb. 7 and fund the government through Jan. 15, but will also add in spending cuts, which appeased Republicans.
The Senate is expect to approve the deal later today followed by the House of Representatives afterwards.
House Speaker John Boehner said earlier the House would not block the compromise.
U.S. credit ratings agency Fitch Ratings on Tuesday placed the U.S. 'AAA' debt on "rating watch negative" due to congressional inability to pass a spending package.
Elsewhere, the Federal Reserve reported in its Beige Book, which analyzes current economic conditions, that the U.S. economy expanded at a modest to moderate pace from September into October, though the U.S. central bank said fiscal uncertainty had been dampening recovery.
Leading Dow Jones Industrial Average performers included JPMorgan Chase, up 3.25%, Goldman Sachs, up 2.93%, and Visa, up 2.15%.
The Dow Jones Industrial Average's worst performers included Cisco, down 0.80%, Home Depot, down 0.32%, and Walt Disney, down 0.15%.
European indices, meanwhile, finished largely higher.
After the close of European trade, the EURO STOXX 50 rose 0.33%, France's CAC 40 fell 0.29%, while Germany's DAX 30 gained 0.47%. Meanwhile, in the U.K. the FTSE 100 finished up 0.34%.
On Thursday, the U.S. is to publish the weekly government report on initial jobless claims, as well as data on manufacturing activity from the Philly Fed.