US Stocks Up 2nd Day In Row On Temporary Debt Ceiling Relief

WASHINGTON (UrduPoint News / Sputnik - 07th October, 2021) US stocks rose for a second day in a row after Republican rivals to the Biden administration agreed to extend the debt ceiling into the year-end to avoid risking a default on the country's payments that could ruin its credit standing.

Wall Street's Big Tech sector, represented by the Nasdaq Composite Index, led gains again on Wednesday, with the blue-chip S&P 500 and the broad-based Dow Jones Industrial Average indexes coming in second and third, respectively.

Nasdaq, comprising growth stocks such as Facebook, Amazon, Apple, Netflix and Google, closed up 68 points, or 0.5%, extending Tuesday's 1.3% climb.

The S&P 500, which groups the top 500 US stocks, closed up 0.4%, after Tuesday's gain of 1%.

The Dow rose 0.3%, adding to the previous session's 1% rise.

Stocks closed up after Senate Minority Leader Mitch McConnell said the Republican party will allow the Biden administration and the Democratic rival aligned to it to pass an extension of the US debt ceiling until December.

Without congressional action to hike the $28.4 trillion debt limit, the Treasury Department says it could run out of money by October 18.

It was not clear if the Democrats would accept McConnell's offer, which still hinged on the Senate eventually hiking the debt limit without Republican votes through a process called budget reconciliation that could delay President Joe Biden's planned $4 trillion economic agenda. Both Biden and Senate Majority Leader Chuck Schumer are opposed to that.

"If Mitch has his way, Biden's economic plan will get delayed so much that they will have to wait till after midterm elections," said Ed Moya, analyst at online trading platform OANDA. "Democrats won't let this drag on too much further. Wall Street still expects Biden's economic plan to get finalized after it is slashed to something around the $2 trillion level."

After a heady run through most of the first three quarters of the year, US stocks have encountered sharp swings since last month on a range of worries that include the expiring debt ceiling, escalating oil prices and inflation. This week alone, Nasdaq had its worst since June on Monday, when it fell just over 2%.