On Wall Street, stock prices rose significantly on Monday as investors hope for an agreement in Washington on reducing the budget deficit, after Republicans agreed to certain concessions.
The Dow Jones index rose by 100 points, or 0.76 percent, to 13,235 points, while the S&P 500 jumped 1.19 percent to 1,430 points, and the Nasdaq index increased by 1.32 percent to 3,010 points.
The surge in the S&P 500 index to its highest level in nearly two months is attributed to investors’ hopes of avoiding the ‘fiscal cliff’, an automatic reduction in budget expenditures and tax increases that could push the U.S. economy into recession.
Yesterday, President Barack Obama and John Boehner met at the White House, where the Republican leader in Congress presented a new proposal to extend tax breaks for those earning less than one million dollars a year.
Although this represents progress in negotiations, the positions of the Republicans and President Obama remain very distant.
Nevertheless, the hope that an agreement will be reached by the end of the year positively affects the market, as stock prices rose in all 10 sectors of the S&P 500 index yesterday.
“Everything is currently overshadowed by negotiations over the ‘fiscal cliff’ and it seems that some progress has been made. Investors hope that something will materialize by the end of the week,” says Alan Lancz, president of Alan B. Lancz & Associates.
