US stocks soar on fiscal-cliff deal

US stocks shot up Wednesday on news of a fiscal-cliff deal in Congress that prevented most tax increases and delayed sharp spending cuts. Fifteen minutes into trade, the Dow Jones Industrial Average was up 215.17 points (1.64 percent) at 13,319.31. The tech-rich Nasdaq Composite added 71.73 points (2.38 percent) at 3,091.24, while the broad-market S&P 500 gained 25.76 (1.81 percent) at 1,451.95. In the first trading day of the new year, Wall Street joined a global equities rally celebrating the passage of a bill that avoids the "fiscal cliff" of automatic spending cuts and tax increases. While markets were closed Tuesday for the New Year holiday, lawmakers approved a compromise bill that raises taxes on the rich and puts off automatic $109 billion federal budget cuts for two months. If they had failed, Americans would have been hit by sweeping tax hikes, and spending cuts would have kicked in across the government, in a combined $500 billion shock that could have undermined the tepid recovery. The Wall Street rally reflected a sense of relief that the tax deal should help keep the US economy from slipping back into recession, said Patrick O'Hare of Briefing.com. "Still, it seemingly ignores the fact that the tax deal, which did not include an extension of the payroll tax cut, is going to be a drag on the economy."