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Dow rises 300 points at standstill and oil business



The Dow jumped more than 300 points on Tuesday after politicians in the United States tentatively agreed on a plan to avert another government shutdown. Equities also rose after Saudi Arabia decided to reduce oil production. The Nasdaq gained 1.4% and the broader S & P 500 gained 1.3%.
Congressional negotiators agreed on a general agreement late Monday to prevent a partial government shutdown later this week. The agreement will not be final until the Congress has passed it and was signed by President Donald Trump. This leaves plenty of room for a new development to destroy the agreement. However, Wall Street was confident that US legislators would avoid another crisis.

"Markets abhor uncertainty, so these are spectacular news that will remove one of the biggest obstacles to US economic growth and prosperity and better financial market conditions," said Chris Rupkey, Chief Financial Economist at MUFG.

The last five-week closure that ended last month cost the US economy $ 1
1 billion – $ 3 billion, which the Congressional Budget Office believes the economy will never recover. That's not a big bump in America's nearly $ 20 trillion economy. However, this degree of political intransigence worried Wall Street about the ability of politicians to agree on something much more serious: raising the US debt ceiling.

Over the next few months, legislators will have to vote to repay the debt America owes. If this is not the case, the United States could not afford its debt payments. This could mean that America will not repay its creditors, possibly causing a shock from the US financial market, on which the government relies to finance its programs and compensate for the massive budget deficit.

Credit rating agencies have already warned that they will lower the United States' credit rating if the legislature does not raise the debt ceiling, which would increase the amount of money the government has to pay for its debt. Rating agencies downgraded America's AAA perfect rating to AA + in 2011 when the government was about to miss a debt payment.

The decommissioning agreement gives investors hope that politicians will not shoot again when it comes to deploying much higher.

Oil rises higher

OPEC, the oil cartel led by Saudi Arabia, announced on Tuesday that it will cut production by 800,000 barrels a day. Investors' concerns that a global slowdown would continue to affect demand have been alleviated and oil producers are not doing enough to curb production.

The price of US crude rose 2% on Tuesday to $ 53.56 a barrel.

Oil prices have risen in recent weeks after the United States sanctioned Venezuela, a major crude oil supplier around the world. The sanctions against Iran have also supported oil prices.

However, increased crude oil production in the United States has depressed oil over the past year. Nevertheless, this year's oil price could rise between 10% and 15% due to OPEC's production cuts and sanctions. Francisco Blanch, Bank of America's global commodities researcher, Merrill Lynch, told Julia Chatterly on CNNi's "First Move" on Tuesday. 19659006] Energy stocks recovered. Hess ( HES ) and Devon Energy (19459010) DVN jumped by nearly 3% each.


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