News / Economy

Global Markets Higher as US Congress Averts Financial Crisis

Traders work on the floor at the New York Stock Exchange in New York, January 2, 2013.
Traders work on the floor at the New York Stock Exchange in New York, January 2, 2013.
VOA News
World markets are opening the new year on a high note, after the U.S. Congress reached a deal to avert an early 2013 financial crisis that threatened to send the world's largest economy into recession.

In the U.S., key stock markets all jumped about 2 percent in Wednesday trading. Stocks also surged in Europe, with markets in London, Frankfurt and Paris all ending the day up more than 2 percent.

Earlier, Asian markets welcomed the U.S. legislative action in the first trading of the new year, with Hong Kong ending up 2.9 percent, Sydney gaining 1.2 percent, and Seoul adding 1.7 percent. Markets in Japan and China were closed for public holidays.

U.S. FISCAL DEAL FACTS

  • Raises $600 billion over 10 years through higher taxes on wealthier Americans
  • Delays by two months billions of dollars in mandatory defense and domestic spending cuts
  • Extends farm bill provisions to prevent a spike in milk prices
  • Blocks cuts to payments for doctors who treat elderly Americans
  • Extends unemployment benefits to 2 million people for one year
  • Cancels a $900 cost-of-living raise for members of Congress
  • Extends child tax credits, and those for college tuition and renewable energy
Major concerns loom

Late Tuesday, the House of Representatives reached a deal to avoid $500 billion in spending cuts and tax increases, endings weeks of quarreling that had overshadowed global markets. While the deal will provide short-term certainty, analysts say it will not do much to address investor concerns about the future since decisions on large spending cuts were delayed two months.

British financial strategist David Buik of the Cantor Index said he is concerned the U.S. reached its $16.4-trillion borrowing limit on Monday and will also have to decide in the coming weeks whether to increase the debt ceiling. Without the ability to borrow more money, the U.S. would face an unprecedented circumstance - running out of money to avoid defaulting on some of its financial obligations.

"We have avoided it [the 'fiscal cliff'], but it is a fudged deal and I think anybody who thinks that it's anything else probably deludes themselves," he said. "I think we are going to hit problems again come February when President Obama presents his budget for 2014.  Clearly one of the issues in that is going to be the debt ceiling and the budget deficit, which clearly at $16.4 trillion is wholly unacceptable.''

You May Like

Video Five Patients Given Experimental Ebola Drug Said To Be Improving

Experimental drugs have been tried on six people: three Westerners and now, three African pyhysicians More

Video In Ukraine, Fear and Distrust Remain Where Fighting has Stopped

As Ukrainian military reclaims control of eastern cities residents rebuild their lives, but many say everyone is being treated with suspicion More

Video In Rural Kenya, Pressure Builds Against Female Circumcision

Girls learn to object; FGM practitioners face penalties from jail sentences to stiff fines More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Five Patients Given Experimental Ebola Drug Said to Be Improvingi
X
Carol Pearson
August 19, 2014 11:43 PM
The World Health Organization has approved the use of experimental treatments for Ebola patients in West Africa. The Ebola outbreak there is unprecedented, the disease deadly. The number of people who have died from Ebola has surpassed 1,200. VOA's Carol Pearson reports on the ethical considerations of allowing experimental drugs to be used.
Video

Video Five Patients Given Experimental Ebola Drug Said to Be Improving

The World Health Organization has approved the use of experimental treatments for Ebola patients in West Africa. The Ebola outbreak there is unprecedented, the disease deadly. The number of people who have died from Ebola has surpassed 1,200. VOA's Carol Pearson reports on the ethical considerations of allowing experimental drugs to be used.
Video

Video In Ukraine, Fear and Distrust Remain Where Fighting has Stopped

As the Ukrainian military reclaims control of eastern cities from pro-Russian separatists, residents are getting a chance to rebuild their lives. VOA's Gabe Joselow reports from the town of Kramatorsk in Donetsk province, where a sense of fear is still in the air, and distrust of the government in Kyiv still runs deep.
Video

Video China Targets Overseas Assets of Corrupt Officials

As China presses forward with its anti-graft effort, authorities are targeting corrupt officials who have sent family members and assets overseas. The efforts have stirred up a debate at home on exactly how many officials take that route and how likely it is they will be caught. Rebecca Valli has this report.
Video

Video Leading The Fight Against Islamic State, Kurds Question Iraqi Future

Western countries including the United States have begun arming the Kurdish Peshmerga forces in northern Iraq to aid their battle against extremist Sunni militants from the Islamic State. But there are concerns that a heavily-armed Kurdistan Regional Government, or KRG, might seek to declare independence and cause the break-up of the Iraqi state. As Henry Ridgwell reports from London, the KRG says it will only seek greater autonomy from Baghdad.
Video

Video In Rural Kenya, Pressure Builds Against Female Circumcision

In some Kenyan communities, female genital mutilation remains a rite of passage. But activists are pushing back, with education for girls and with threats of punishment those who perform the circumcision. Mohammed Yusuf looks at the practice in the rural eastern community of Tharaka-Nithi.
Video

Video For Obama, Racial Violence is Personal Issue

The racial violence in the St. Louis suburb of Ferguson is presenting U.S. President Barack Obama with an issue to which he has a deep personal connection. To many Americans, Obama's election as America's first black president marked a turning point in race relations in the United States, and Obama has made ending the violence a policy priority. On Monday he issued a new call for calm and understanding. Luis Ramirez reports from the White House.
Video

Video Clinton-Obama Relationship Could Impact 2016 Election

President Barack Obama and former Secretary of State Hillary Clinton have a long and complicated relationship. That relationship took another turn recently when Clinton criticized the president’s foreign policy. VOA National Correspondent Jim Malone reports there is renewed attention on the Clinton-Obama relationship as Hillary Clinton considers running for
Video

Video Iran Looks to Maintain Influence in Baghdad With New Shia PM

Washington and Tehran share the goal of stopping Syrian-based militants in Iraq. But experts say it's Iran, not the United States, that will most influence how the new government in Baghdad approaches internal reforms and the war in Syria. VOA State Department Correspondent Scott Stearns has the story.

AppleAndroid

World Currencies

EUR
USD
0.7492
JPY
USD
102.27
GBP
USD
0.5960
CAD
USD
1.0950
INR
USD
61.300

Rates may not be current.