US indices bounce back to close positive with debt limit hope

By Ovunc Kutlu

ANKARA (AA) - US indices bounced back from previous losses to close in positive territory Wednesday as hopes of raising the debt limit calmed concerns about an American default.

Despite opening in negative territory and extending losses, the Dow Jones closed at 34,417, a 0.3% gain, or 102 points.

The S&P 500 also recovered to end at 4,363, up 17 points, or 0.41%.

The tech-heavy Nasdaq finished at 14,501, rising 0.47%, or 68 points.

The stock price of Uber jumped 3% and Twitter rose more than 2.3% with Microsoft, Airbnb, Amazon and Google's parent firm Alphabet each gaining over 1%.

The positive sentiment returned to the market after Senate Minority Leader Mitch McConnell offered Democrats to pass a short-term debt limit extension to cover current spending levels into December. The move could avoid the US running into default on Oct. 18.

"To protect the American people from a near-term Democrat-created crisis, we will also allow Democrats to use normal procedures to pass an emergency debt limit extension at a fixed dollar amount to cover current spending levels into December," he said in a statement.

"This will moot Democrats’ excuses about the time crunch they created and give the unified Democratic government more than enough time to pass standalone debt limit legislation through reconciliation," he added.

Amid easing fears, the VIX volatility index was down 1.4% to 21 after the fear index earlier climbed as high as 24.4.

The yield on 10-year US Treasury notes also fell 0.22% to 1.528%, but the dollar index was up 0.26% to 94.22.

Precious metals also recovered with gold adding 0.2% to $1,763 per ounce and silver rising 0.2% to $22.67.

Oil prices reversed course from three-year highs with a 2.2% loss. Brent crude was trading at $80.83 per barrel and US benchmark West Texas Intermediate was at $77.06.

Bitcoin was above $55,000, its highest level in almost five months, with a 7.3% daily gain.

The total value of the digital coin market stood at almost $2.31 trillion with Bitcoin dominating with a 45% share, according to data by digital asset price-tracking website CoinMarketCap.