NEW YORK – The stock market broke out of a three-week funk Thursday as the United States moved closer to a deal to avert a U.S. government default.
The Standard & Poor’s 500 index rose 19 points, or 1.2 percent, to 1,676. The Dow Jones industrial average jumped 178 points, or 1.2 percent, to 14,984 after the first hour of trading. The Nasdaq composite index added 53 points, or 1.5 percent, to 3,731.
The market has been sliding since mid-September as the gridlock in Washington got investors worried the U.S. could default on its debt and wreak havoc on financial markets. As of Wednesday, the S&P 500 index had fallen 4 percent since reaching an all-time high of 1,725 on Sept. 18.
President Barack Obama will meet with top House Republicans at the White House to seek a path beyond a confrontation that has left the government shuttered for more than a week.
GOP aides said House Speaker John Boehner will ask House Republicans to approve a short-term extension of the government’s ability to borrow to meet its bills.
The Ohio Republican is slated to urge his staunchly conservative GOP colleagues to act before the government runs out of borrowing authority next week.
Republicans have been insistent that budget cuts and other measures be added to the so-called debt ceiling legislation, but the aides wouldn’t say whether he’ll seek to add other material to the measure.
The aides required anonymity to reveal the information before Boehner makes an announcement after a closed-door meeting with his GOP colleagues.
There were hopeful signs in the market for short-term U.S. government debt early Thursday. The yield on the one-month Treasury bill fell to 0.20 percent from 0.27 percent late Wednesday.
The yield had spiked from near zero at the beginning of the month to as high as 0.35 percent Tuesday as investors dumped the bills out of concern that the government might not be able to pay them back when they’re due. Investors demand higher yields when they perceive debt as being risky.
Taylor reported from Washington.