U.S. Markets closed

Stocks surge as Washington closes in on debt deal

Trader Robert Charmak, left, works on the floor of the New York Stock Exchange Tuesday, Oct. 15, 2013. World stock markets fluctuated between gains and losses Wednesday Oct. 16, 2013 as a deadline for divided U.S. lawmakers to agree on a higher government borrowing limit drew ever closer. (AP Photo/Richard Drew)

NEW YORK (AP) -- Stocks are surging on Wall Street as Washington closes in on a deal to avoid a default by the U.S. government.

The Dow Jones industrial average rose 189 points, or 1.3 percent, to 15,357 in midday trading after news that Senate leaders had reached an agreement to avert a default and reopen the government. The bill must still pass the House of Representatives as well as the Senate.

The Standard & Poor's 500 index was up 21 points, or 1.3 percent, to 1,719 points. The S&P 500 is now just six points below an all-time high it reached on Sept. 18.

The Nasdaq composite rose 40 points, or 1 percent, to 3,833.

Yields on Treasury bills fell as investors became less nervous about a potential default by the government.