By Dow Jones Business News, October 10, 2013, 04:37:00 PM EDT
By Kate Gibson, MarketWatch
NEW YORK (MarketWatch) -- U.S. stocks soared on Thursday, with the Dow Jones Industrial Average notching its best one-
day point gain since December 2011, after House Republican leaders proposed a temporary extension of the nation's debt
"Cooler heads are prevailing it seems; the [proposed] agreement gives lawmakers time to negotiate policy on the debt,"
said Alain Skrainka, chief investment officer at Cornerstone Wealth Management LLC.
The White House on Thursday called encouraging the Republican plan to hike the debt ceiling for six weeks with no
policy strings attached, reducing the danger of a U.S. default. The Treasury has said the debt ceiling needs to be
raised by Oct. 17 or the U.S. won't be able to pay its bills.
"Nobody gets everything they want," House Speaker John Boehner said Thursday. The Ohio Republican said his party would
be offering the temporary hike in the debt limit in exchange for budget talks.
"It's my understanding that discussions are going on in that theatrical place we call Congress now," said Randy
Frederick, managing director of active trading and derivatives at Charles Schwab.
Closing above 15,000 for the first time in four days, and making its biggest point leap since Dec. 20, 2011, the Dow
Jones Industrial Average (DJI)climbed 323.09 points, or 2.2%, to 15,126.07, with aerospace manufacturer Boeing Co. (BA)
pacing gains that included all of its 30 components.
The S&P 500 index (SPX) advanced 36.16 points, or 2.2%, to 1,692.56, with financials pacing gains that extended to all
10 of its major industry groups, with the index tallying its biggest daily gain since Jan. 2.
The CBOE Volatility Index, or VIX (VIX), fell 3.2 points, or 16%, to 16.40. The gauge of investor sentiment on
Wednesday climbed above 21, reflecting "an increase in uncertainty but not panic by any stretch," said Frederick. "If
investors were pricing in a real possibility of a default, the VIX could be at 30 or 40," he added, referring back to
the spring of 2011, "when we had the last big debt-ceiling debate" and the VIX ran up to 31.
Notable gainers included shares of electronics-retailer Best Buy Co. Inc. ( BBY ), up 7.6%.
Citrix Systems Inc. ( CTXS ) led S&P 500 decliners, off almost 12% after the cloud-computing company late Wednesday
warned its third-quarter revenue and profit would come in below expectations.
Marking its best single-day gain since Jan. 2, the Nasdaq Composite (RIXF) gained 82.97 points, or 2.3%, to 3,760.75.
For every share falling, six gained on the New York Stock Exchange, where 738 million shares traded. Composite volume
neared 3.4 billion.
The yield on the 10-year Treasury note (10_YEAR) used to determine mortgage rates and other consumer loans climbed 3
basis points to 2.694%.
"I've been quite surprised that the interest rate hasn't risen much while this has been going on. I'm a bit puzzled by
how the 10-year has taken this in stride pretty nicely," said Frederick of the bond market's reaction to the long-
running standoff on Capitol Hill.
The dollar(DXY) advanced against the currencies of major U.S. trading partners including the Japanese yen (USDJPY)
but excluding the euro (EURUSD). Energy costs rose, with futures (CLX3) pricing a barrel of crude at $103.01, up $1.40,
Gold futures (GCZ3) lost $8.80, or 0.7%, to $1,298.40 an ounce.
Also Thursday, Treasury Secretary Jack Lew testified before the Senate Finance Committee, warning lawmakers that
failing to hike the nation's debt limit by Oct. 17 might endanger Social Security and Medicare checks.
And, the Labor Department reported the number of Americans filing for initial jobless benefits jumped to 374,000 last
week, with the larger-than-expected rise largely reflecting computer glitches in California.
"Given the chaos within prior and now current readings, we'll take this with a pinch of salt," Andrew Wilkinson, chief
economic strategist at Miller Tabak & Co. LLC, wrote in emailed commentary.
"The rise in claims is the largest since Hurricane Sandy about a year ago and lifts the headline to the most since
March. It will now take several weeks to shake out the impact of the shutdown leaving investors guessing precisely how
much the private sector is feeling its impact," he said.
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
Copyright (c) 2013 Dow Jones & Company, Inc.