NEW YORK – Expectations of a Senate vote to extend tax cuts is helping fuel early gains in the stock market. Treasury bonds are falling Monday to their lowest levels since June.
World stock markets rose. China's benchmark Shanghai Composite Index gained 2.8 percent after Chinese authorities surprised investors by not raising interest rates. Investors had anticipated an interest rate hike to combat the country's high inflation.
Blue chip stocks in Europe are up 0.5 percent.
In early trading, the Dow Jones industrial average is up 25, or 0.2 percent, to 11,435. The S&P 500 is up 4, or 0.3 percent, to 1,244. The Nasdaq composite index is up 5, or 0.2 percent, to 2,643.
THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP's earlier story is below.
NEW YORK (AP) — Expectations that the Senate will vote to extend tax cuts pointed to early gains in the stock market Monday. Treasury bond yields rose to their highest levels since June.
The tax cut compromise brokered by the White House and Congressional Republicans was scheduled for its first vote in the Senate on Monday afternoon. Lawmakers expect it to pass easily.
If enacted, the package will extend tax cuts passed during the Bush administration for all income levels for another two years. It will also extend unemployment benefits and put in place a one-year reduction in Social Security taxes.
Economists expect the nearly $900 billion tax package to boost economic growth and increase the size of the budget deficit. House Democrats have pledged to not support the measure unless tax rates rise for the nation's wealthiest estates.
The tax plan has crushed Treasury bonds since it was announced last week. The yield of 10-year Treasurys rose to 3.36 percent, up from 3.33 percent late Friday. The bond yielded 2.4 percent in mid-October. Bond prices move in the opposite direction of their yields.
World stock markets rose. China's benchmark Shanghai Composite Index gained 2.8 percent after Chinese authorities surprised investors by not raising interest rates. Investors had anticipated an interest rate hike to combat high inflation.
Blue chip stocks in Europe rose 0.4 percent.
In pre-market trading, the Dow Jones industrial average rose 34, or 0.3 percent, to 11,442. Standard and Poor's 500 futures gained 3.10, or 0.3 percent, to 1,239. Nasdaq 100 futures rose 4.75, or 0.2 percent, to 2,219.75.
The S&P 500 closed Friday at 1,240.40, the third straight day that it reached a new high for the year.
There are no major economic reports or corporate earnings announcements scheduled for Monday.