By Yasin Ebrahim

Investing.com – The S&P 500 racked up gains Thursday, as agreement on a stop-gap measure to raise the debt ceiling and temporarily avert a U.S. default paved the way for a sea of green on Wall Street.

The S&P 500 rose 0.97%, the Dow Jones Industrial Average gained 1.1% or 366.90 points, the Nasdaq was up 1.2%.

U.S. Senate Majority Leader Chuck Schumer said lawmakers reached an agreement to raise the Treasury Department’s debt ceiling by $480 billion to allow the government to meet its liabilities until December.

“The deal takes the near term risk off the table … and allows Democrats to turn their focus to finding a compromise on the multi-trillion reconciliation package,” said Aptus Capital Advisors portfolio manager David Wagner said in an interview with Investing.com on Thursday​

Cyclical stocks, which tend to move in tandem with the economy, led the broader move higher.

Consumer discretionary was the top performing sector, underpinned by 6% sharp in Penn National Gaming (NASDAQ:PENN) after the casino and sports betting company received approval to acquire sports media company theScore.

A rally in autos including General Motors (NYSE:GM) and Ford rounded off the list of the top-performing consumer discretionary stocks amid ongoing optimism about both automaker’s electric vehicle plans.

Energy stocks climbed as oil prices cut losses after shrugging off fears about a potential increase in supply after the U.S. said it would consider tapping emergency oil reserves to ease the pressure on gas prices.

Megacap tech, which sparked the broader market rebound a day earlier, continued to trend higher.

Apart from Apple (NASDAQ:AAPL), Microsoft (NASDAQ:MSFT), Amazon.com (NASDAQ:AMZN), and Alphabet (NASDAQ:GOOGL) were in the green.

Twitter (NYSE:TWTR), meanwhile, jumped 4% after it detailing plans to sell its MoPub mobile advertising network to mobile game developer AppLovin for $1.05 billion.

On the earnings front, Levi Strauss&Co (NYSE:LEVI) was the standout performer, rising 9% after its quarterly results that topped Wall Street expectations on both the top and bottom lines.

With a just a day to go until the nonfarm payrolls for September, better-than-expected weekly jobless claims data stoked investor optimism on the recovery in the labor market.

The labor department reported that 326,000 people filed for unemployment insurance, down 38,000 from the prior week’s upwardly revised 364,000, and lower the forecasts for 348,000 filers.

The fall in claims pointing to a recovery in the labor market supported by expectations for improved monthly jobs data due Friday that could provide the Federal Reserve with the green light to begin tapering its bond purchases next month.

Economist expect that the U.S. economy created 500,000 jobs last month, which would be a sharp improvement from the 235,000 seen in August.

“The Fed is going to taper starting this year, the pace will likely be $15 billion a month, but that hasn’t been made official policy yet,” Wagner added. “The biggest risk to markets heading into Friday’s jobs report is that it causes the Fed to get more aggressive on their tapering of QE so that it ends earlier in 2022.”

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