January 3, 2013, Thomson Reuters
U.S. markets joined in a global rally Wednesday, sparked by a long-awaited resolution on the fiscal cliff. The Dow and S&P 500 soared roughly two percent in early trading while the Nasdaq surged more than two and a half percent.
Commodities moved higher too. Oil jumped almost two percent and gold hit a two-week high.
U.S. lawmakers’ approved plan to avoid $600 billion in tax increases give many people, like Victor Quintana, a sense of relief.
SOUNDBITE: VICTOR QUINTANA, WORKS NEAR WALL STREET, (ENGLISH) SAYING:
"I think it had to be done. Something needed to be done about the economy. We can’t just cross our arms. There is too much to do."
However, others, like Traci Scott, feel the fiscal cliff pact falls short.
SOUNDBITE: TRACI SCOTT, WORKS NEAR WALL STREET, (ENGLISH) SAYING:
"I think, number one for there only to be one dollar’s worth of savings or one dollar’s worth of tax breaks for 41 dollars of tax hikes. That doesn’t seem to make any sense when it comes to the math itself."
The legislation, expected to be signed by President Obama, postpones major spending cuts for another two months. Across the Atlantic, Cantor Index’s David Buik says this translates into a fudged deal.
SOUNDBITE: DAVID BUIK, SENIOR STRATEGIST, CANTOR INDEX, (ENGLISH) SAYING:
"I think anybody who thinks that it’s anything else probably deludes themselves. I think we are going to hit problems again come February when President Obama presents his budget for 2014."
Some market watchers say this rally is short lived. However, the deal does erase a major headwind for businesses and consumers, which could provide a boost to the economy and stocks in the year ahead.