Stocks higher as U.S. debt fears fade

Borrowing deal in Congress raises optimism of investors

Technology companies helped lift stocks on Wall Street higher Thursday as investors welcomed the end of a standoff in Congress over extending the federal debt ceiling.

An agreement to extend temporarily the government’s borrowing authority into December gives lawmakers more time to reach a solution, averting an unprecedented federal default that experts say would have devastated the economy.

The S&P 500 rose 0.8 percent, its third-straight gain. Nearly 80 percent of stocks within the benchmark index gained ground. The Dow Jones Industrial Average rose 1 percent, while the tech-heavy Nasdaq closed 1.1 percent higher.

The debt ceiling debate and the potential for a federal default are among many concerns that have been weighing on the market. Those worries sent the benchmark S&P 500 swinging between daily gains and losses of more than 1 percent for four days.

The temporary compromise between Republicans and Democrats may have helped give investors optimism that Congress can work out compromises in other areas, said Greg Bassuk, CEO at Axs Investments.

“The fact that it actually got done, we think, frankly, that we are seeing an outsized reaction in the markets today because of the sentiment that, ‘Hey, maybe some more can get done as well,’” he said.

The S&P 500 rose 36.21 points to 4,399.76. The

Dow gained 337.95 points to 34,754.94, and the Nasdaq added 152.10 points to 14,654.02.

Small company stocks, a gauge of confidence in economic growth, also notched gains. The Russell 2000 index picked up 35.14 points, or 1.6 percent, to 2,250.09. Markets in Europe and Asia also closed broadly higher.

Technology stocks powered a big share of the S&P 500’s gains. Apple rose

0.9 percent and chipmaker Nvidia added 1.8 percent.

Energy futures prices bounced back after the U.S. Energy Department said it is not planning on tapping oil reserves. The price of U.S. crude oil rose 1.1 percent.

The yield on the 10-year Treasury increased to 1.57 percent from 1.52 percent.

COVID-19 continues to hamper the economic recovery after a surge of cases over the summer. Consumer spending and job growth were stunted, and supply chain problems crimped operations in a range of industries.