By RTT News, October 01, 2013, 10:02:00 AM EDT
(RTTNews.com) - Stocks have moved mostly higher in early trading on Tuesday, regaining some ground after ending the previous session firmly in the red. The major averages have all moved to the upside, although buying interest remains somewhat subdued.
The major averages currently remain in positive territory, although the Dow is posting only a slim gain. While the Dow is up 3.85 points or less than a tenth of a percent at 15,133.52, the Nasdaq is up 13.54 points or 0.4 percent at 3,785.02 and the S&P 500 is up 4.67 points or 0.3 percent at 1,686.22.
The early strength on Wall Street comes despite news that lawmakers failed to reach an agreement on a temporary spending bill, resulting in a government shutdown.
The GOP-controlled House passed a bill that would have kept the government running but delayed the implementation of Obamacare.
However, the Democratic-controlled Senate rejected the legislation, resulting in the first government shutdown in seventeen years.
While essential government employees such as air traffic controllers, prison guards, and members of the Border Patrol will remain on the job, about 800,000 federal employees will be furloughed as a result of the government shutdown.
Peter Boockvar, chief market analyst at the Lindsey Group, said the upward momentum for the markets despite the government shutdown reflects two things.
"1) The market believes the subsequent shutdown will be temporary and the eventual agreement will be wrapped up with a debt ceiling deal in the weeks to come and 2) the Fed won't be tapering any time soon with the now GDP risk (however moderate) from the partial close of the government," Boockvar said.
He added, "Assuming #1 happens, I repeat that #2 will continue to be the main thing the markets are focused on in addition to earnings in coming weeks."
Airline stocks have shown a strong upward move in early trading, driving the NYSE Arca Airline Index up by 1.5 percent. Republic Airways ( RJET ) is leading the sector higher after agreeing to sell Frontier Airlines to an affiliate of Indigo Partners in a deal valued at about $145 million.
Healthcare provider, oil service, and networking stocks are also seeing early strength, while gold stocks have come under pressure amid a sharp drop by the price of the precious metal.
In overseas trading, stock markets across the Asia-Pacific region moved mostly higher on Tuesday, although the markets in Hong Kong and mainland China were closed for public holidays. Japan's Nikkei 225 Index edged up by 0.2 percent.
Meanwhile, the major European markets are turning in a mixed performance on the day. While the U.K.'s FTSE 100 Index is down by 0.3 percent, the French CAC 40 Index is up by 0.8 percent and the German DAX Index is up by 0.5 percent.
In the bond market, treasuries are seeing modest weakness after trending higher in recent weeks. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 1.9 basis points at 2.634 percent.
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