Benchmarks moved higher as the end to a government shutdown seemed near after lawmakers agreed to a compromise. The crucial agreement between Democrats and Republicans lawmakers also saved the country from a possible default on its debt. After yesterday's strong gains, the S&P 500 is only a few points away from an all-time high. Meanwhile, Federal Reserve's released its latest "Beige Book" report which revealed that the U.S. economy expanded at a "modest to moderate" pace in September and early October. All ten sectors of the S&P 500 industry groups finished in the green led by the financial and health care sectors.BANK OF AMER CP (BAC): Free Stock Analysis ReportCITIGROUP INC (C): Free Stock Analysis ReportGOLDMAN SACHS (GS): Free Stock Analysis ReportJPMORGAN CHASE (JPM): Free Stock Analysis ReportPEPSICO INC (PEP): Free Stock Analysis ReportPNC FINL SVC CP (PNC): Free Stock Analysis ReportWELLS FARGO-NEW (WFC): Free Stock Analysis ReportTo read this article on Zacks.com click here.
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The Dow Jones Industrial Average (DJI) gained 1.4% to close the day at 15373.83. The S&P 500 added 1.4% to finish yesterday's trading session at 1721.54. The tech-laden Nasdaq Composite Index climbed 1.2% to end at 3839.43. The fear-gauge CBOE Volatility Index (VIX) tumbled 21.2% to settle at 14.71. Consolidated volumes on the New York Stock Exchange, American Stock Exchange and Nasdaq were roughly 5.37 billion shares, considerably lower than 2013's average of 6.0 billion shares. Advancing stocks outnumbered the decliners. For 78% shares that advanced, only 19% declined.
Stocks surged higher after U.S. Senate Majority Leader Harry Reid and Senate Republican leader Mitch McConnell said senators have reached an agreement to end the government shutdown through January 15 and increase the country's borrowing limit till February 17. The House of Representatives was planning to vote on the proposal later in the day. The agreement was expected to go through after Senator Ted Cruz of Texas, the fiercest Republican opponent of the deal, said he would not use procedural moves to delay a vote.
On the home front, the Federal Reserve released its latest "Beige Book" report. According to the report, eight out of the twelve Federal Reserve's districts reported steady growth. However, Philadelphia, Richmond, Chicago, and Kansas City Districts reported slower growth. Consumer spending maintained gains and activity in the travel and tourism sector also grew in most districts. Manufacturing activity expanded "modestly" while employment growth "remained modest".
On the earnings front, Bank of America Corp (NYSE: BAC ) reported its third quarter results. Both earnings and revenue for the company came in above the Street's estimates. Bank of America's third quarter results were boosted by a decrease in expenses, a satisfactory credit situation and increase in equity income. The company's profits jumped to $2.5 billion from $340 million in the year ago period. Shares climbed more than 2% yesterday.
Shares of PepsiCo, Inc. (NYSE: PEP ) gained 2.1% after the company announced its quarterly results. The company's earnings surpassed the Street's estimates. Despite a sharp decline in its diet drinks business, PepsiCo reported higher profits due to its snacks business. CEO Indra Nooyi said: "In the last six to nine months, there has been an accelerated decline in diet drinks as people say they don't even want artificial sweeteners. The diet slowdown has been a little more rapid than we expected." The company's net income increased marginally to $1.91 billion in the third quarter from the year ago figure of $1.90 billion.
The financial sector was the biggest gainer among the S&P 500 industry groups and the Financial Select Sector SPDR (XLF) jumped 2.1%. Shares such as PNC Financial Services Group Inc (NYSE: PNC ), Goldman Sachs Group Inc. (NYSE: GS ), Wells Fargo & Co. (NYSE: WFC ), JPMorgan Chase & Co. (NYSE: JPM ) and Citigroup Inc. (NYSE: C ) added 1.9%, 2.9%, 1.6%, 3.2% and 4.1%, respectively.