23 August, 2014 / Shawwal 26, 1435

Traders work on the floor of the New York Stock Exchange on Jan 2, 2013 in New York City. A day after US lawmakers reached a last minute agreement to avert the fiscal cliff, US stocks surged as traders around the globe felt renewed confidence over global markets. Shortly after the opening bell, The Dow Jones Industrial Average rallied more than 230 points, or 1.7 per cent. - AFP Photo
Traders work on the floor of the New York Stock Exchange on Jan 2, 2013 in New York City. A day after US lawmakers reached a last minute agreement to avert the fiscal cliff, US stocks surged as traders around the globe felt renewed confidence over global markets. Shortly after the opening bell, The Dow Jones Industrial Average rallied more than 230 points, or 1.7 per cent. - AFP Photo

NEW YORK: US stocks took off flying on the first trading day of the new year Wednesday after Congress reached a last-minute deal to avert the fiscal cliff, avoiding forcing the economy back into recession.

The S&P 500 soared 2.5 per cent, its best rise since Dec 20, 2011, as traders shrugged off the specter that a new deficit fight between Democrats and Republicans was just weeks away to go on a buying spree.

The Dow Jones Industrial Index closed up 308.41 points (2.35 per cent) at 13,412.55. The broad-based S&P 500 added 36.23 (2.54 per cent) at 1,462.42, while the Nasdaq outperformed with a 92.75 point gain, or 3.07 per cent, to 3,112.26.

The surge, which saw a number of blue-chip companies racking up three percent-plus gains, wrapped up an extraordinary new year run on global bourses, all encouraged that Washington would avoid the growth-crunching tax hikes and spending cuts of the cliff.

“It may have come at the last minute, but US lawmakers finally managed to find some common ground by voting through a package of policies designed to avoid the immediate fiscal cliff,” noted ETX Capital trader Joe Rundle.

Also helping was positive purchasing managers’ index data for manufacturing in China, India and the United States, while eurozone activity remained in contraction.

Among leading companies, AT&T rose 3.8 per cent, Microsoft 3.4 per cent, Apple 3.2 per cent, and IBM 2.5 per cent.

Auto-sharing service Zipcar roared 47.8 per cent higher after car-rental giant Avis announcing plans to buy it in a deal valued at $500 million. Avis rose 4.8 per cent.

Boeing rose 2.3 per cent after announcing an order from leasing company Aviation Capital Group for 60 of its new 737 MAX jetliners, a deal worth $6 billion at current list prices.

Fresh food and fruit giant Dole plunged 13.4 per cent, hit by a statement that its global banana business could suffer due to the huge impact that December's Typhoon Bopha had on the Philippine banana crop.

“The current estimated impact to the Asian banana industry is a loss of 30 million 13-kilo boxes, which is approximately 14 per cent of the Asian banana industry on an annualised basis,” the company said.

Another loser was bookseller Barnes & Noble, which late last month admitted its Nook e-reader sales over Christmas were disappointing.

Bond prices fell, driven by the news of the fiscal cliff deal. The 10-year yield rose to 1.84 per cent from 1.76 per cent Monday, while the 30-year jumped to 3.05 per cent from 2.95 per cent. Bond prices and yields move inversely.

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