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US stocks surge on "fiscal cliff" deal optimism

(Xinhua) Updated: 2013-01-03 01:20

NEW YORK - US stocks opened sharply higher on Wednesday as the "fiscal cliff" deal approved by the US Senate and House of Representatives stimulated optimism in the market.

The agreement to avert "fiscal cliff" was passed by lawmakers late Tuesday. It eased investors' nerves by preventing tax increase for most Americans and delaying automatic spending cuts by two months.

The stock market surged on the first trading day of 2013, driven by optimism that the "fiscal cliff" issue was solved through bipartisan efforts.

On the corporate news, Zipcar soared nearly 50 percent as the car sharing company is to be bought by Avis for 500 million US dollars.

Bank of America also gained as the bank planned to buy back 5 billion dollars worth of stocks which Warren Buffett took in 2011.

On the economic front, the non-manufacturing index for December and construction data for November will be released later in the day.

The Dow Jones Industrial Average gained 227.13, or 1.73 percent, to 13,331.27. The S&P 500 Index increased 27.13, or 1.90 percent, to 1,453.32. The Nasdaq Composite Index advanced 73.45, or 2.43 percent, to 3,092.96.

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