US stocks higher as budget-debt cap deal appears near

NEW YORK CITY (AFP) - United States stocks reversed losses and finished higher Monday amid encouraging signs from the White House and Congress that a deal was in reach on the budget and debt ceiling.

The Dow Jones Industrial Average added 64.15 points (0.42 per cent) at 15,301.26.

The broader S&P 500 rose 6.94 (0.41 per cent) to 1,710.14, and the Nasdaq Composite gained 23.40 (0.62 per cent) at 3,815.27.

The Dow rebounded from a 100-plus point loss in the morning when traders showed nervousness over the looming Oct 17 deadline to raise the country's borrowing ceiling or see the cash-short Treasury forced to default on payments, possibly including US debt.

But early-afternoon reports of real progress towards a deal that would remove that worry and reopen the government with a fresh budget turned the market around.

"I'm very optimistic we will reach an agreement that's reasonable in nature this week to reopen the government, pay the nation's bills and begin long-term negotiations to put our country on sound fiscal footing," said Senate Majority leader Harry Reid.

Drug maker Pfizer led the Dow 30, putting on 2.2 per cent.

Appliance maker Whirlpool dropped 6.5 per cent, the fall ostensibly linked to an analyst report pointing to slower sales.

Netflix surged 7.8 per cent as the company revealed a deal with Sony Television Pictures for an original series, linking the two for the first time.

Among other stocks with significant volumes, Facebook added 0.8 per cent while retail giant Wal-Mart fell 1.2 per cent.

The main US bond markets were closed on Monday for the Columbus Day holiday, leaving the 10-year Treasury at 2.69 per cent, while the 30-year was at 3.75 per cent.

Join ST's Telegram channel and get the latest breaking news delivered to you.