US stocks gain on deal that could avert shutdown

Traders work on the floor of the New York Stock Exchange. (Reuters pic)

NEW YORK: Wall Street stocks rose early Tuesday after a bipartisan group of senior US lawmakers reached a tentative deal that could avert another government shutdown.

About 15 minutes into trading, the Dow Jones Industrial Average rose 1.0% to 25,293.29.

The broad-based S&P 500 gained 0.9% to 2,733.14, while the tech-rich Nasdaq Composite Index advanced 1.0% to 7,379.06.

US lawmakers announced late Monday an agreement in principle to avoid another government shutdown later this week, agreeing on nearly US$1.4 billion in money for construction of a wall on the border with Mexico.

President Donald Trump, who had sought US$5.7 billion for the controversial project, had yet to comment on the substance of the deal. Some prominent Republicans, including conservative commentator Sean Hannity, dismissed the compromise.

Markets were also eyeing US-China trade talks in Beijing. New US tariffs are scheduled to come into effect on March 1 if an agreement is not struck.

Among individual companies, cosmetics company Coty shot up 15.0% after JAB Holding Company proposed buying up to 150 million shares, raising its stake to about 60% of the company.

JAB manages the fortune of Germany’s Reimann family.