Market Reacts to Fiscal-Cliff Resolution
LONDON -- Today the FTSE 100 rose 130 points, or 2.2%, following the announcement that the U.S. House of Representatives has passed the fiscal-cliff bill.
The Republicans and Democrats came to a compromise at the last minute, agreeing on a deal that will impose tax rises on the country's wealthiest, sparing the working and middle classes. On Tuesday night, Congress voted in favor of the bill with a majority vote of 257-167.
If no agreement had been reached between the two political parties by Jan. 1 -- the fiscal cliff being midnight on Dec. 31, 2012 -- then every American taxpayer faced an automatic tax rise, totaling $536 billion. Additionally, spending cuts from domestic and military programs of $109 billion would likely have affected markets around the world and slowed the economic recovery.
As it is, the Footsie now finds itself beyond the 6,000-point mark, while markets around the world have also responded positively. Hong Kong's Hang Seng index is up 2.9%, and Australia's ASX 200 also made big gains.
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