Stocks soar as politicians move closer to a deal to avoid a US default; Dow jumps 300 points
NEW YORK (AP) — You can almost hear Wall Street exhaling.
The Dow Jones industrial average soared more than 300 points Thursday after Republican leaders and President Barack Obama finally seemed willing to end a 10-day budget standoff that has threatened to leave the U.S. unable to pay its bills.
The news drove the Dow to its biggest point rise this year and ended a three-week funk in stocks. It also injected some calm into the frazzled market for short-term government debt.
Republican leaders said Thursday they would vote to extend the government’s borrowing authority for six weeks. A spokesman for Obama said the president would “likely” sign a bill to increase the nation’s ability to borrow money so it can continue paying its bills.
“Congressmen and women are coming to terms with how calamitous it would be if the debt ceiling was not raised,” said Joseph Tanious, Global Market Strategist for J.P. Morgan Asset Management. “Cooler heads are prevailing.”
Washington’s freeze of aid to Egypt whips up anti-American sentiment, may help army chief
CAIRO (AP) — Washington’s decision to withhold millions of dollars in mostly military aid to Egypt is fueling anti-U.S. sentiment and the perception that Washington supports Mohammed Morsi, the Islamist president the military ousted in a July coup.
That could boost the popularity of the military chief, Gen. Abdel-Fattah el-Sissi, whom the U.S. is trying to pressure to ensure a transition to democracy and ease the fierce crackdown on Morsi’s Muslim Brotherhood.
The aid freeze could also embolden Morsi’s supporters to intensify their campaign of street protests in the belief that the military-backed government is losing the goodwill of its top foreign backer. The protests, met by a fierce response by security forces that has left hundreds dead, have kept the new government from tackling Egypt’s pressing problems after 2 ½ years of turmoil.