NEW YORK (AP) — Wall Street finally got the deal it’s been waiting for.
A last-minute agreement to keep the U.S. from defaulting on its debt and reopen the government sent the stock market soaring Wednesday, lifting the Standard & Poor’s 500 index close to a record high.
The deal was reached just hours before a deadline to raise the nation’s $16.7 trillion debt limit. Senate leaders agreed to extend government borrowing through Feb. 7 and to fund the government through Jan. 15.
The agreement follows a month of political gridlock that threatened to make America a deadbeat and derail global markets, which depend on the U.S. to pay its bills. American government debt is widely considered the world’s safest investment.
Markets stayed largely calm throughout the drama in Washington, with the S&P 500 actually gaining 2.4 percent since the shutdown began Oct. 1, after House Republicans demanded changes to President Barack Obama’s health care law before passing a budget.
Wall Street gambled that politicians wouldn’t let the U.S. default, a calamity economists said could paralyze lending and push the economy into another recession.
Congress was racing to pass the legislation before the Thursday deadline.
If the deal wraps up soon, investors can turn their attention back to economic basics like third-quarter earnings.