Wall Street climbs as Senate leaders announce fiscal deal

By Julia Edwards

NEW YORK (Reuters) - U.S. stocks surged on Wednesday, nearing an all-time high, after Senate leaders said they had reached a deal to raise the government debt ceiling, one day before the U.S. defaults on its debt.

U.S. Senate Majority Leader Harry Reid and Senate Republican leader Mitch McConnell said leaders had come to an agreement, which will reopen the government through January 15 and raise the debt ceiling until February 7. The House of Representatives planned to vote on the measure later in the day.

The gains brought the S&P 500 index within striking distance of the record intraday high of 1729.86 set on September 19. Trading volume was low, however, at just 2.4 billion shares, as many investors stayed on the sidelines over the uncertainty coming from Washington.

"Even though the market is moving up, this is a real historic event that is happening here so there is pause and concern," said Frank Davis, director of sales and trading at LEK Securities in New York.

"You are seeing a lack of activity because it's hard to invest in a market where you don't know what's around the corner."

Throughout the crisis, many strategists have argued that the brief sell-offs would be a buying opportunity because Washington would get its act together. That scenario, at the moment, seems to be playing out. On the New York Stock Exchange, more than three stocks were rising for every share that was falling.

All ten S&P sectors were up, led by financials on hopes for the debt deal and strong quarterly results. The sector gained 1.8 percent.

The Dow Jones industrial average was up 194.65 points, or 1.28 percent, at 15,362.66. The Standard & Poor's 500 Index was up 22.53 points, or 1.33 percent, at 1,720.59. The Nasdaq Composite Index was up 42.25 points, or 1.11 percent, at 3,836.26.

Bank of America Corp reported a third-quarter profit of $2.22 billion, compared with a loss a year earlier, as provisions for credit losses fell. Shares were up 2.16 percent at $14.46.

"Not a bad quarter given the environment with Bank of America showing impressive capital levels and solid execution." Jeff Morris, head of U.S. equities at Standard Life Investments.

Shares of Yahoo eased back after rising earlier a day after the company reported third-quarter earnings that were slightly above forecasts by analysts. The company's shares were last down 0.6 percent at $33.19.

The corporate earnings season is off to a good start as the majority of companies has met or beaten estimates, said Jonathan Golub, chief U.S. market strategist at RBC Capital Markets in New York.

IBM , American Express and eBay are all expected to report after the close of the market.

J.P. Morgan will pay $100 million to settle charges for the "London Whale" trading scandal, the Commodity Futures Trading Commission said on Wednesday. J.P.Morgan shares were up 2.7 percent to $53.75.

(Editing by Bernadette Baum, Kenneth Barry and Chizu Nomiyama)

Source: http://news.yahoo.com/wall-st-set-higher-open-hopes-fiscal-deal-131323214--finance.html
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