Under the deal, the government would reopen through Jan. 15 and Treasury would be allowed to increase the U.S. borrowing authority through Feb. 7.
The S&P/TSX composite index gained 25.75 points at 12,957.21, held back by weakness in the mining sectors.
The Canadian dollar rose 0.43 of a cent to 96.77 cents US.
U.S. indexes surged as the deal was reached, just hours before the debt limit deadline. At that point, Washington would have lost its ability to borrow and been required to meet its obligations with cash-in-hand and incoming tax receipts.
The Senate and the House are to vote on the measure later Wednesday.
The Dow Jones industrials jumped 205.82 points to 15,373.83, helped along by earnings from toymaker Mattel, Bank of America and PepsiCo that beat expectations.
The Nasdaq was ahead 45.42 points to 3,839.43 and the S&P 500 index was up 23.48 points to 1,721.54.
Equity markets were relatively calm since the beginning of the month when the U.S. government went into partial shutdown and Republicans originally demanded major changes to President Barack Obama's signature health care legislation. In fact, both the TSX and New York markets have chalked up gains, in contrast to the last debt ceiling standoff in August 2011 when stocks sold off amid huge volatility.
"Investors have become, unfortunately, accustomed to some of the dysfunction," said Eric Wiegand, a senior portfolio manager at U.S. Bank.
"It’s become more the norm than the exception."
Consumer staples led advancers with Loblaw Cos. Ltd. (TSX:L) ahead $1.08 to $47.09 after the grocer said it was cutting its management and administrative ranks by 275 employees as it tries to reduce expenses alongside its acquisition of Shoppers Drug Mart.
Commodities generally advanced following word that an agreement had been reached, and the energy sector was ahead 0.6 per cent and the November crude contract on the New York Mercantile Exchange erased early losses to close up $1.08 at US$102.29 a barrel. Suncor Energy (TSX:SU) climbed 32 cents to C$37.44.
The TSX gold sector led decliners, down about two per cent, while December gold bullion in New York turned positive, gaining $9.10 to US$1,282.30 an ounce. Goldcorp. (TSX:G) faded 56 cents to C$24.41.
The base metals component eased 0.49 per cent as December copper on the Nymex was unchanged at US$3.31 a pound. First Quantum Minerals (TSX:FM) gave back 27 cents to C$18.59.
Ivanhoe Mines (TSX:IVN) jumped 13 cents or 6.1 per cent to $2.26 in the wake of reports of strong exploration results at a platinum mine project in South Africa.
The industrials sector was slightly higher but shares in SNC-Lavalin Inc. (TSX:SNC) fell $2, or 4.53 per cent, to $42.13 after the engineering company said it now expects consolidated net income in fiscal 2013 to be in the range of $10 million to $50 million, sharply lower than earlier guidance in the range of $220 million to $235 million. Among other things, SNC blamed a number of money-losing legacy contracts.
Investors will now be able to turn their attention to fundamentals such as a backlog of economic data that can now be released with government operations getting back to normal.
And the third quarter earnings reporting season is gaining momentum.
"That’s what will ultimately prevail in terms of stock prices, are corporate earnings and fundamentals," said Garey Aitken, chief investment officer at Franklin Bissett Investment Management.
"This gets lost in the shuffle here as we deal with these headline macro concerns that will trump fundamentals in the short term but ultimately, that is what we’re focused on."
On Wednesday, PepsiCo posted earnings of US$1.91 billion, or $1.23 per share. That compared with $1.9 billion, or $1.21 per share, a year ago. Not including one-time items, the company said it earned $1.24 per share, seven cents better than analysts’ forecasts. Revenue rose two per cent to $16.91 billion, less than the $17.02 billion Wall Street expected. Its shares gained $ to US$ .
Bank of America Corp. earned $2.5 billion, or 20 cents a share, in the July-September period, up from $340 million a year earlier and beating the 19 cents expected by financial analysts. Third-quarter revenue slipped to $22.2 billion from $22.5 billion, coming in close to the analysts’ forecast of $22 billion and its shares ticked up 32 cents to $14.56.
Mattel’s third-quarter net income rose 16 per cent to $422.8 million, or $1.21 per share. That was up from $365.9 million, or $1.04 per share, in the prior-year period. Its performance beat Wall Street expectations and its shares ran ahead 42 cents to $41.97.
After the close, IBM posted earnings ex-items of $3.99 a share, three cents better than analysts. But revenue of $23.72 billion missed estimates of $24.75 billion and its shares fell four per cent in after hours trading as of 4:30 p.m. ET.