Major U.S. stock averages are soaring Wednesday as risk appetite rises across the globe.
NEW YORK (TheStreet) -- Major U.S. stock averages were soaring in morning trading Wednesday as risk appetite around the world soared on the first trading day of the year after both the Senate and the House of Representatives passed a bill to avert the "fiscal cliff."
The Dow Jones Industrial Average was up 254 points, or 1.94%, at 13,358. The blue-chip index was having its biggest single day gain since Nov. 19.
The S&P 500 was up 28.07 points, or 1.97%, at 1454. The Nasdaq was up more than 76 points, or 2.53%, at 3095.
All 10 S&P 500 large-cap sectors and 30 Dow components were advancing.
Tax hikes are still set to take place but to a more diluted degree and unemployment benefits will be extended until the end of the year. Planned spending cuts scheduled to kick in this month are to be postponed for two months.
"It sets up another showdown within weeks which has the potential to be even more disruptive given the U.S. debt ceiling must be raised at the same time if technical default is to be avoided," commented Gareth Berry, a currency strategist at UBS. "But for now the conditions seem right for a moderate celebratory rally in risk assets, however brief, and we would be reluctant to fight this just yet."
"Wall Street will likely savor the resolution for the time being, but experience renewed investment agita before the quarter is out, offering better entry levels as the year progresses," said Sam Stovall, chief equity strategist at S&P Capital IQ.
Analysts at Cantor Fitzgerald noted that the markets seemed to be shrugging off the fact that the U.S. did in fact hit its debt ceiling late on Dec. 31, with no rating agencies having spoken out on U.S. debt following the event.
Markets were closed Tuesday for the New Year's Day holiday.
The Institute for Supply Management said Wednesday that the ISM Manufacturing Index rose to 50.7 in December from contraction territory at 49.5 in November. Economists expected an increase to 50.3 in December.
Paul Ashworth, U.S. economist at Capital Economics, said that the deal reached to avert most of the scheduled tax increases could provide a small boost to manufacturers in January, but "it is far from a certainty, particularly when the spending cuts that will hit government contractors hard have only been delayed for a couple of months."
The Census Bureau reported that construction spending fell 0.3% in November after rising by a downwardly revised 0.7% in October. Economists had predicted an increase of 0.6% for November.
Gold for February delivery was surging by $11 at $1,686.80 an ounce at the Comex division of the New York Mercantile Exchange, while February crude oil contracts were up $1.49 at $93.31 a barrel.
The benchmark 10-year Treasury was sliding by 25/32, pushing the yield up to 1.847%. The dollar was down 0.33%, according to the U.S. dollar index.
Overseas markets were sharply higher on the fiscal cliff deal. The FTSE 100 in London was gaining 2.26%, while the DAX in Germany was tacking on 2.11%. Hong Kong's Hang Seng closed ahead by 2.89%.
The Japanese market was closed and is scheduled to reopen on Friday.
In corporate news, Avis (:CAR) announced that it is acquiring Zipcar (:ZIP) for about $500 million, or $12.25 a share in cash, a 49% premium over Zipcar's closing price on Dec. 31.
Zipcar shares were surging by more than 48%. Avis shares were jumping by more than 3.5%.
Live Nation Entertainment's (:LYV) Irving Azoff plans to resign as chairman of the concert promoter and will sell 1.7 million Live Nation shares to Liberty Media(:LMCA) .
Shares were tacking on more than 3%.
High seas and strong winds prevented crews from boarding a Royal Dutch Shell (:RDS.A) drilling ship to check for any damage after the large vessel went aground off an uninhabited island in the Gulf of Alaska, The Associated Press reported.
Shares were up 0.86%.
Intel's (:INTC) effort to develop an Internet-based TV service and associated hardware is taking longer than expected, people familiar with the company's plans told The Wall Street Journal, in part due to delays in reaching content agreements with media companies.
Shares were up more than 2%.
Hewlett-Packard(:HPQ) is evaluating the sale of businesses that don't meet goals more than a year after CEO Meg Whitman said she didn't plan to spin off the PC division, according to a Bloomberg report.
Shares were advancing by more than 6.5%.
Facebook(:FB) shares were gaining more than 4%, lifted by positive analyst sentiment.
Apple(:AAPL) shares were popping more than 3.5% as investors anticipate a big rally this year for tech giant.
Synergy Pharmaceuticals(:SGYP) shares were popping more than 17% after the biotech company announced that its treatment of chronic constipation met the primary and key secondary endpoints of a later phase clinical study.
Cablevision(: CVC) and Viacom(: VIA) have reached a long-term agreement that ensures no disruption of Viacom programming for Cablevision customers, according to the New York Post.
Cablevision shares were rising more than 2% and Viacom shares were up more than 2.5%.
-- Written by Andrea Tse in New York.
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