By Dow Jones Business News, October 01, 2013, 04:30:00 PM EDT
By Kate Gibson, MarketWatch
NEW YORK (MarketWatch) -- U.S. stocks on Tuesday climbed for the first session in three, bouncing back from multi-week
lows, as investors predicted the government's first partial shutdown in 17 years would be short-lived and cause limited
"The market likes certainty. Yesterday there was uncertainty. Today there is certainty that the government is starting
to shut down. Right now, we think the fundamentals of companies and the economy will not be affected by what is going on
in Washington," said Mike Serio, a Denver-based regional chief investment officer at Wells Fargo Private Bank.
"However, if the government shutdown goes on for a prolonged time and the debt-ceiling issue on Oct. 17 does not get
resolved, we're going to have to go back and revisit our GDP number for the year," Serio added.
The Dow Jones Industrial Average (DJI) on Tuesday rose 62.03 points, or 0.4%, to end at 15,191.70. Merck & Co. ( MRK )
led blue-chip gains, up 2.4% after the pharmaceutical company said it cut 8,500 workers. On Monday, the index closed
lower for a seventh session in eight, and at its lowest level since Sept. 9.
U.S. lawmakers failed to reach agreement on a federal budget by midnight, launching a shutdown that means temporary
unpaid leave for hundreds of thousands of federal employees. View a recap of President Barack Obama's statement on the
Also rising from a three-week low, the S&P 500 index (SPX) advanced 13.45 points, or 0.8%, to 1,695, with health care
and technology leading sector gains. All 10 of the S&P 500's major sectors finished higher.
Walgreen Co.'s ( WAG ) shares rallied 4.5% after the drugstore chain reported increased quarterly profit and improving
sales trends in September.
WellPoint Inc. ( WLP ) jumped 3%, with its shares and those of other health-care providers gaining after open enrollment
that started Tuesday for new exchanges under the Affordable Care Act. (Read more on Health Exchange: http://
Ford Motor Co. ( F ) climbed 1.9% after the auto manufacturer reported an increase in September sales, topping
Apple Inc. ( AAPL ) shares leapt 2.4% after billionaire investor Carl Icahn tweeted that he lobbied for a $150 billion
stock repurchase in discussions with CEO Tim Cook.
Rebounding from a two-week low, the Nasdaq Composite (RIXF) climbed 46.50 points, or 1.2%, to 3,817.98.
On Tuesday, 717 million shares traded on the New York Stock Exchange. Composite volume topped 3.17 billion.
The cost of energy and gold fell on the New York Mercantile Exchange, with crude futures (CLX3) off 29 cents, or 0.3%,
to $102.04 a barrel.
Gold futures for December (GCZ3) delivery lost $40.90, or 3.1%, to end the session at $1,286.10 an ounce. Andrew
Wilkinson, chief economic strategist at Miller Tabak & Co., reported hearing from a London contact of a "major U.S. fund
rebalancing in gold."
The U.S. dollar(DXY) edged down against other currencies, including the yen (USDJPY) and the euro (EURUSD).
As equities climbed, Treasury prices fell, with the yield on the 10-year note (10_YEAR) used in figuring mortgages
and other consumer loans rising 3 basis points to 2.645%.
The take-away stock market and Treasury yields is "the impasse will be short-lived," Wilkinson noted in emailed
"A lot of folks look at the fact that things generally are improving in the market and the economy, and many missed
the boat, so they are using this as an opportunity to invest, because they know the shutdown is going to be temporary,"
said Alan Skrainka, chief investment officer at Cornerstone Wealth Management.
Federal agencies were told to reduce services after members of Congress did not manage to end a standoff that had the
Democratic-controlled Senate taking out provisions passed by the House that tied funding government operations to
postponing or cutting back the health-care law.
On Tuesday, the Senate voted to reject a House-passed motion calling for both chambers to hold a conference to try to
resolve the budget stalemate.
The scheduled release Tuesday of a government report on construction spending was delayed, and the Labor Department
won't put out its monthly jobs report on Friday should the government remain closed. Read commentary on filling in some
of the missing numbers.
Stocks maintained a modest advance after a measure of U.S. manufacturing activity hit a two-year high, continuing a
streak of mostly solid readings on the factory sector.
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