U.S. stocks rally in wake of Geithner comments on deficits

Stock markets in the United States rallied on Tuesday after U.S. Treasury Secretary Timothy Geithner warned that long-term budget deficits endanger the national economy and must be curbed as soon as possible. 

"When recovery is firmly in place and the economy is back on its feet, we need to begin the process of bringing down deficits that Washington has been accumulating for almost a decade," he said in prepared testimony for the Senate Finance Committee. 

The treasury secretary spoke after U.S. President Barack Obama projected on Monday that the U.S. budget deficit would soar to a fresh record in 2010. 

Geithner added: “Every American knows that the path of our deficits is too high and that if they persist long after this recession ends, they will pose a corrosive threat to our economic future." 

U.S. stock markets rose in the wake of his remarks: The Dow Jones Industrial Average was up 0.52%, the S&P 500 index rose 0.75% and the Nasdaq Composite Index was up 0.39%.