Debt Deal Emerging to Raise Limit With Two-Year Spending Cap (2)

Republican and White House negotiators are moving closer to an agreement to raise the debt limit and cap federal spending for two years, according to people familiar with the matter, as time grows short to avert a catastrophic US default.

US stocks rose early Friday as traders weighed the reports of an emerging deal against strong economic data pointing toward another Federal Reserve interest-rates increase. Yields on Treasury bills maturing in early June tumbled, a sign investors are regaining confidence in on-time repayment during the window when a US default would be likely without a deal.

The two sides ...