Stocks Rally on Debt Deal Enthusiasm

U.S. stocks were sharply higher in early trading on Monday fueled by enthusiasm over the White House and Congress reaching an agreement on raising the United States’ debt limit. the Dow Jones Industrial Average lately rose 49.42 points to 12,192.66. The Standard & Poor’s 500 Index gained 4.31 points to 1,296.59. The Nasdaq Composite Index added 11.52 points to 2,767.90.

President Barack Obama and Senate leaders announced Sunday night that they have reached agreement on a “framework” debt deal that will cut spending and increase the federal debt ceiling. The agreement would lift the cloud of possible default that has hovered over global financial markets.

British banking group HSBC said Monday it will cut 30,000 jobs worldwide by 2013 and sell almost half its retail bank branches in the U.S., part of a new strategy to focus on fast-growing emerging markets. The bank, which reported a better-than-expected 3 percent increase in pretax profits to $11.5 billion in the six months to June, has already cut 5,000 jobs this year. Another 25,000 will be slashed by 2013, spokesman Patrick Humphris said.

China’s manufacturing activity contracted slightly in July, signaling a deterioration in the operating environment at the nation’s factories, as tighter monetary conditions weighed further on the sector, according to data released Monday by HSBC. The monthly purchasing managers index fell to 49.3, its lowest reading since March 2009, compared with 50.1 in June.