Mid-Day Update: Stocks Rebound As Congress Draws Closer to Deal on Budget, Debt Ceiling Legislation
Stocks are sharply higher today, reflecting investor confidence Congress will find a deal averting a potential default on government debt. The Dow Jones Industrials Average has been up as much as 200 points today and the Nasdaq Composite is at a 13-year high as the financial markets largely shrug off a downgrade warning by Fitch Ratings last night as well as a reported drop in homebuilder confidence this morning. Also lending strength to today's gains are bullish earnings from Bank of America ( BAC ), Pepsico ( PEP ) and Yahoo ( YHOO ), more than offsetting disappointing results from Black and Decker ( SWK ).
Senate Majority Leader Harry Reid and Minority Leader Mitch McConnell during the past hour outlined a tentative deal to reopen the federal government and extend the government's borrowing authority.
The National Association of Home Builders today reported a drop in member confidence, sliding from a downwardly revised 57 in September to a 55 reading this month as the partial federal government shutdown, higher mortgage rates and rising building costs weighed on industry sentiment. Still, the index remains above its 50.0 reading indicating expansionary conditions.
European markets were mostly higher, recovering in concert with U.S. markets as well as upbeat UK housing data and tame EU inflation.
Crude oil was up $1.16 to $102.37 per barrel. Natural gas was up $0.04 to $4.06 per 1 million BTU. Gold was down $2.30 to $1,271.60 an ounce, while silver was up $0.04 to $21.23 an ounce. Copper was up $0.01 to $3.32 per pound.
Among energy ETFs, the United States Oil Fund was up 1.34% to $36.96 with the United States Natural Gas Fund was up 1.28% to $19.79. Amongst precious-metal funds, the Market Vectors Gold Miners ETF was down 1.56% to 23.31 while SPDR Gold Shares were down 0.63% to $122.96. The iShares Silver Trust was down 0.49% to $20.46.
Here's where the markets stand at mid-day:
NYSE Composite Index up 108.79 (+1.12%) to 9,835.41
Dow Jones Industrial Average up 191.63 (+1.26%) to 15,359.64
S&P 500 up 22.25 (+1.31%) to 1,720.31
Nasdaq Composite Index up 44.71 (+1.18%) to 3,838.72
Nikkei 225 Index up 0.18%
Hang Seng Index down 0.46%
Shanghai China Composite Index down 1.81%
FTSE 100 Index up 0.34%
CAC 40 down 0.29%
DAX up 0.47%
NYSE SECTOR INDICES
NYSE Energy Sector Index up 1.22%
NYSE Financial Sector Index up 1.61%
NYSE Healthcare Sector Index up 1.20%
(+) AAP (+16.2%) Agrees to acquire privately held equipment supplier General Parts International Inc. for $2.04 billion in cash; also reports preliminary Q3 EPS beating analyst estimates.
(+) VEEV (+80.2%) Prices $13-million initial public offering of stock at $20 per share.
(+) OXGN (+7.6%) Said the company's Zybrestat drug candidate "significantly reduced tumor size" in mice during pre-clinical testing.
(-) SWK (-14.0%) Q3 EPS miss by $0.01 per share.
(-) ELLI (-11.6%) September origination data showed that as the portion of loans being used for purchases rose in the month, credit standards fell.
(-) LLTC (-2.3%) Reports Q1 non-GAAP earnings of $0.52, topping the analyst consensus by $0.06 per share on Capital IQ.