Other indexes also posted big gains. The Nasdaq composite closed up 23.71 points, or 0.6 percent, to 3,863.15.
The Russell 2000 index, which is made up of primarily smaller, riskier companies, also hit an all-time high. It closed up 9.85 points, or 0.9 percent, to 1,102.27 and has risen nearly 30 percent this year.
Market analysts think the 16-day partial shutdown of the government caused billions of dollars of damage to the economy. Government employees were furloughed, contracts were delayed, and tourism declined at national parks.
Analysts at Wells Fargo said the shutdown likely lowered economic growth by 0.5 percentage point.
There remain broader concerns that Democrats and Republicans won’t be able to draw up a longer-term budget. The deal approved late Wednesday only permits the Treasury Department to borrow through Feb. 7 and fund the government through Jan. 15.
“The agreement represents another temporary fix that pushes fiscal uncertainty into the early months of next year,” Wells Fargo analysts said.
Despite the worries, signs of normalcy returned to financial markets yesterday.
The one-month Treasury bill was back to trading at a yield of 0.01 percent, about where it was a month ago, and down sharply from 0.35 percent on Tuesday.
Usually a staid, conservative security, the one-month T-bill was subjected to a wave of selling at the beginning of the month. Investors feared the T-bill would be the first piece of government debt to be affected by a U.S. default if the debt ceiling was breached and the federal government could no longer pay its obligations.
The yield on the more closely-watched 10-year Treasury note fell to 2.60 percent from 2.67 percent Wednesday.