RTRS: GLOBAL MARKETS-Gold jumps on risk aversion; oil slumps
U.S. stocks rose on Wednesday as lawmakers reached a compromise deal on a stimulus package, even as gold shot to a six-month high and government debt prices gained as investors expressed doubts about the U.S. government's revamped plan to rescue ailing banks.
The dollar rose against the yen in choppy trade as the highly anticipated plan unveiled on Tuesday by U.S. Treasury Secretary Timothy Geithner fell short of market expectations and drove up the appeal of safe havens.
U.S. oil prices fell 4.3 percent after the International Energy Agency said global energy demand this year would post its biggest decline since 1982 due to the world's downturn.
U.S. stocks rose to session highs at the close, boosted by a compromise deal that U.S. lawmakers reached on a $789 billion package of tax cuts and spending aimed at reviving the flagging U.S. economy. Voting could begin as early as Thursday.
"The fact they were able to compromise was sufficient to get the market to take a breath after yesterday," said Marc Pado, U.S. market strategist at Cantor Fitzgerald & Co. "That I think is what helped turn the market around."
The stock rally bucked a worldwide trend in equities, and the market was driven higher by financial shares that had been heavily beaten down a day earlier.
MSCI's all-country index .MIWD00000PUS fell 0.23 percent, while an index of Europe's leading companies and a pan-Asia index outside of Japan also declined.
The Dow Jones industrial average .DJI closed up 50.65 points, or 0.64 percent, at 7,939.53. The Standard & Poor's 500 Index .SPX added 6.58 points, or 0.80 percent, at 833.74. The Nasdaq Composite Index .IXIC climbed 5.77 points, or 0.38 percent, at 1,530.50.
Shares of JPMorgan (JPM.N) climbed 6 percent, making it a top boost to the Dow, while Citigroup (C.N) added 10.2 percent and Bank of American gained 9.2 percent.
The S&P financial index advanced 5.2 percent, after an 11 percent slide on Tuesday, and the KBW Banks index .BKX advanced 6 percent, after Tuesday's nearly 14 percent slide.
U.S. and euro zone government debt prices rose on worries about the effectiveness of the Treasury's bank rescue plan.
