CNN — U.S. stocks surged into the New Year after U.S. lawmakers reached a last minute deal to avert the fiscal cliff.
The Dow Jones Industrial Average rallied more than 260 points, or 2%, early Wednesday. Gains were broad, with all 30 Dow stocks showing solid gains.
The S&P 500 rose 2%, while the Nasdaq spiked 2.5%.
Financial shares were among the strongest gainers, with Bank of America, JPMorgan Chase and Citigroup rising between 2% and 4%. Credit card companies Visa and MasterCard both hit all-time highs. Tech stocks were also faring well, with Apple and Hewlett-Packard logging big increases.
Oil and gold prices also posted sharp gains, while the dollar was mixed, gaining against the yen but weakening against the euro and Bristish pound.
As investors shifted into riskier assets, safe havens, such as U.S. Treasuries sold off, with the yield on the 10-year note rising to 1.84% - a level not seen since mid-October.
Investors cheered the late night deal reached by the House that keeps the Bush tax cuts in place for most Americans, but raises the tax rate on individuals earning more than $400,000 and married couples earning over $450,000.
Lawmakers allowed the payroll tax cut to expire but extended federal emergency unemployment insurance benefits for another year.
Investors ignored any downsides to the deal, including Congress's failure to tackle automatic spending cuts, which are now set to go into effect March 1. Additional -- and perhaps more intractable -- challenges remain. Congress must soon raise the debt ceiling, and figure out plans for the postponed spending cuts and the federal budget.
"Congress has done the easy part," said Lewis Alexander, chief U.S. economist for Nomura, in a research note. "Now a new Congress will have to tackle the hard part -- reduce long-term spending, raise additional revenue and increase the debt limit."
Major global markets were closed Tuesday for the New Year's holiday -- but many overseas markets posted strong gains Wednesday after news of the deal broke.
European markets were broadly higher in early trading, posting gains of more than 2%. Asian markets ended higher. Australia's ASX All Ordinaries index added 1.3%. South Korea's KOSPI gained 1.7% and the Hang Seng in Hong Kong advanced 1.9%.
Japan's Nikkei and the Shanghai Composite remain closed in an extended New Year's holiday.
Aside from weighing the deal's impact, investors also got some good news on the economic front. The Institute for Supply Management's monthly manufacturing index showed activity rebounded in December. Investors shrugged off the Census Bureau's data on construction spending, which showed a decrease in of 0.3% in November. Analysts had predicted a 0.5% increase.