Glimmer of hope in U.S. debt talks buoys markets

Hopes that U.S. politicians will be able to reach a deal on raising the government's debt limit, avoiding the risk of a disastrous default, supported global markets Monday, when Wall Street was closed for Martin Luther King Jr. Day.

Congress must agree by the end of February to increase the limit on how much the U.S. can borrow so the government can service its debt. If it doesn't, the country could default, which would deal a heavy blow to global financial markets and undermine confidence in the world's largest economy.

Republicans said they were willing to raise the debt ceiling temporarily and have also backed away from their insistence on deep spending concessions in exchange for raising the ceiling; they plan to seek spending cuts separately. The signs of compromise encouraged investors to buy global stock indexes, many of which are near multiyear highs.

"Although this again could be seen as another round of political battle, any progress to avoid immediate dangers will likely be seen as positive," said Gary Yau, analyst at Credit Agricole CIB, in a report.

In commodity markets, the benchmark oil contract for February delivery was down 50 cents to $95.06 per barrel in electronic trading on the New York Mercantile Exchange.-- AP