Stocks surge after Senate debt deal

new york » Wall Street finally got the deal it’s been waiting for.

Alast-minute agreement to keep theU.S. from defaulting on its debt and reopen the government sent the stock market soaring Wednesday, pushing the Standard& Poor’s 500 index close to a record high.

OnWednesday, Senate leaders agreed to fund the government through Jan. 15 and extend government borrowing through Feb. 7.

The deal came just hours before aThursday deadline thatTreasury Secretary Jacob Lew had set to raise the $16.7 trillion debt limit. The government has been partially shut for 16 days because House Republicans had demanded changes to President Barack Obama’s health care law before passing a budget.

The agreement follows amonth of political gridlock that threatened to makeAmerica a deadbeat and derail global financial markets. Investors have stayed largely calm throughout in the current drama inWash- ington, with the S&P 500 actually gaining 2.4 percent since the partial shutdown began on Oct. 1.

Wall Street had bet that politicians wouldn’t let the U.S. default, a calamity economists said could paralyze lending and push the economy into another recession.

“We knewitwas going to be dramatic, but the consequences of a U.S. default are just so severe that the base casewas always that a compromise was going to be reached,” said Tom Franks, a managing director at TIAA CREF, a large retirement funds manager.

Congress was racing to pass the legislationWednesday.

On Wednesday, the Dow Jones climbed 205.82 points, or 1.4 percent, to 15,373.83. The S&P 500 gained 23.48, or 1.4 percent, at 1,721.54. The Nasdaq composite climbed 45.42, or 1.2 percent, to 3,839.43.