Breaking News Bar
updated: 10/11/2013 4:04 PM

Stocks rise as debt talks continue

hello
Success - Article sent! close
  • Trader Jonathan Corpina works Friday on the floor of the New York Stock Exchange.

      Trader Jonathan Corpina works Friday on the floor of the New York Stock Exchange.
    Associated Press

 
Associated Press

The closer Washington gets to a deal over the debt ceiling, the higher stocks go.

Stock prices rose for a second day in a row on Friday as investors bet against a U.S. debt default. The Dow Jones industrial average rose 111 points Friday, bringing its two-day gain to 434. Its jump on Thursday was the biggest this year.

Call it the Sigh of Relief Rally.

A partial government shutdown pushed the Dow below 15,000 this week before President Barack Obama and House Republicans met on Thursday to talk about the outlines for a possible deal. Obama and Republican senators met on Friday, too.

Stocks set new highs in mid-September but declined steadily since then as the federal government got closer to the partial shutdown that began Oct. 1. That shutdown entered its 11th day on Friday.

Even more troubling for investors is the expectation that the government will reach its borrowing limit on Oct. 17, which raises the possibility of a default on government borrowing. U.S. government bonds are usually considered the world's safest investment, so even the possibility of a default has rattled investors.

"It's nice when the world does not revolve around politicians making decisions for Wall Street," said Ralph Fogel, investment strategist and partner at Fogel Neale Partners in New York.

The Dow rose 111.04 points, or 0.7 percent, to close at 15,237.11. The Standard & Poor's 500 index rose 10.64 points, or 0.6 percent, to 1,703.20. The Nasdaq rose 31.13 points, or 0.8 percent, to 3,791.87.

Kim Forrest, an equity research analyst at Fort Pitt Capital Group in Pittsburgh, said it's too soon to assume that the meetings in Washington will avert a default.

"That's super that they're talking to each other, but what on Earth is the agreement going to look like, and is it going to stave off default? I don't think we know that yet," Forrest said. "I think the stock market is getting ahead of itself."

All 10 industry groups in the S&P 500 index rose, led by energy and technology companies.

Gold fell, and took gold mining stocks down with it. Gold for December delivery fell $28.70, or 2.2 percent, to $1,268.20 per ounce, its lowest price since mid-July. Mining company Barrick Gold fell 73 cents, or 3.9 percent, to $17.81. Newmont Mining fell 68 cents, or 2.6 percent, to $25.62.

The price of crude oil fell 99 cents to $102.02 a barrel after a report showed growing supplies of oil outside of OPEC.

The yield on the 10-year Treasury note rose slightly to 2.69 percent from 2.68 percent.

The stock gains were enough to put the big indexes back into positive territory for the week, other than the Nasdaq, which fell almost a half-percent this week.

Among other stocks making notable moves:

• Safeway rose $2.18, or 7 percent, to $33.75, the biggest gain in the S&P 500 index. The grocery store operator said late Thursday that it plans to sell its Chicago-area Dominick's stores, allowing it to concentrate on its more profitable business.

• Micron Technology fell $1.59, or 9 percent, to $16.84 after the flash memory maker's quarterly profit left investors wanting more.

• Gap sank $2.65, or 7 percent, to $36.83 after it reported a 3 percent drop in sales for September. Analysts had expected a gain of 1.6 percent. Micron, Gap, and Newmont Mining were the three biggest decliners in the S&P 500.

Share

Interested in reusing this article?

Custom reprints are a powerful and strategic way to share your article with customers, employees and prospects.

The YGS Group provides digital and printed reprint services for Daily Herald. Complete the form to the right and a reprint consultant will contact you to discuss how you can reuse this article.

Need more information about reprints? Visit our Reprints Section for more details.

Contact information ( * required )

Name * Company Telephone * E-mail *

Message (optional)

Success - Reprint request sent Click to close
Comments ()
Guidelines: Keep it civil and on topic; no profanity, vulgarity, slurs or personal attacks. People who harass others or joke about tragedies will be blocked. If a comment violates these standards or our terms of service, click the X in the upper right corner of the comment box. To find our more, read our FAQ.
    help here