December 5, 2013
Wall Street jumps on signs of progress in Washington talks
US stocks closed up today, with each of the major indexes climbing more than 2 percent, as investors were encouraged by signs of progress in fiscal negotiations in Washington.
The Dow Jones industrial average rose 323.09 points or 2.18 percent, to 15,126.07, the S&P 500 gained 36.16 points or 2.18 percent, to 1,692.56 and the Nasdaq Composite added 82.971 points or 2.26 percent, to 3,760.747.
European shares bounced back from their lowest close in more than a month as signs of progress in Washington on ending the US budget stalemate whetted appetite for risk.
The FTSEurofirst 300 was up 1.2 percent at 1,239.58, having ended the previous session at its lowest since Sept. 5. Banks and autos - both up more than 2 percent - led gains, as investors bought cyclical shares.
The Euro STOXX 50 Volatility index, or VSTOXX, also did an about-turn, down 13.6 percent after hitting a five-week high on Wednesday, signalling a sharp rise in demand for risk.
US Republicans were looking into a short-term hike in the government's borrowing authority to buy time for talks on broader policy issues, a Republican leadership aide said on Wednesday. If the debt ceiling is not raised by an October 15 deadline, the United States could default on some debt.
House Republican leaders will visit the White House today. US President Barack Obama has said he would accept a short-term ceiling increase as long as no strings were attached.
Despite the intense focus on the US budget situation, the FTSEurofirst 300 is only 2.7 percent off a five-year high hit in September, with analysts saying that if investors really thought a US default were possible, it would have fallen more.
Meanwhile, Japan's Nikkei share average gained 1.1 percent and hit a one-week high, buoyed by hopes that US politicians will resolve the fiscal standoff soon, lifting such exporters as Toyota Motor Corp and Honda Motor Co. The Nikkei closed up at 14,194.71 after touching 14,200.31, its highest since Oct. 3. The Topix gained 1 percent to 1,177.95.