The Enid News and Eagle, Enid, OK

National and world

October 16, 2013

Stocks rise sharply on optimism for a debt deal

NEW YORK — The stock market surged in late morning trading as Washington closed in on a deal to avoid a default by the U.S. government.

The Dow Jones industrial average spiked 200 points, or 1.3 percent, to 15,370 in late morning trading shortly after news that Senate leaders reached an agreement to avert a default. Rates on short-term U.S. government debt also fell as investors became less nervous about a possible default.

The bill must still pass the House of Representatives as well as the Senate.

The deal would also reopen the government, which has been partially shut for 16 days.

The Standard & Poor's 500 index gained 22 points, or 1 percent, to 1,715. The Nasdaq composite rose 43 points, or 1.2 percent, to 3,834.

Unless the debt limit is raised, the U.S. will hit a Thursday deadline after which it can no longer borrow money to pay its bills, increasing the chance of a default on government debt. That possibility has unnerved markets all month.

"The lawmakers know it's in our best interest for this to be settled," said JJ Kinahan, chief derivatives strategists for TD Ameritrade. "There's a belief that they'll take it as far as they can and ultimately, at the last minute, settle it."

Yields on Treasury bills fell sharply as hopes built for compromise ahead of the Thursday deadline to raise the U.S. debt ceiling. The yield on the one-month T-bill dropped from 0.40 percent to 0.26 percent Wednesday morning, an extraordinarily large move. The decline means that investors consider the bill to be less risky.

The yield on the 10-year bond edged up to 2.75 percent from 2.74 percent on Tuesday. Yields on longer-term U.S. government debt haven't moved as much as those on short-term debt because investors generally believe the government will work out a longer-term solution for paying its debts on time even as partisan gridlock in Washington holds up a short-term solution.

Fitch Ratings said late Tuesday that it may downgrade the government's AAA bond rating. The agency said it sees a higher risk for default because of the uncertainty over whether Congress will raise the debt limit. Fitch said it will make a final decision by the end of March at the latest, depending on how long any agreement to raise the debt ceiling lasts.

The dollar fell against the euro and the Japanese yen.

Among stocks making big moves:

• Mattel gained $1.75, or 2.2 percent, to $43.30, after the company's third-quarter net income rose 16 percent thanks to high demand for dolls like Monster High, Barbie and American Girl. The results were better than Wall Street analysts had forecast.

• Bank of America rose 22 cents, or 1.5 percent, to $14.46 after the second-largest U.S. bank reported that it earned $2.5 billion in the July-September period, up from $340 million a year earlier. On a per-share basis, earnings were 20 cents, beating the 19 cents expected by financial analysts.

• Stanley Black & Decker plunged $12.60, or 14.1 percent, to $76.68 after the company lowered its profit forecast for the year, citing slower growth in emerging markets and a hit from the U.S. government shutdown.

 

1
Text Only
National and world
  • CDC Ebola web.jpg U.S. warns against traveling to Ebola-hit countries

    “The bottom line is Ebola is worsening in West Africa,” said Dr. Tom Frieden, director of the Centers for Disease Control and Prevention, who announced the travel warning.

    August 1, 2014 1 Photo

  • Mideast web.jpg Gaza truce comes after days of pushing for a deal

    Finally, less than an hour after all sides signed off on the precise and technical wording for a 72-hour truce, Kerry issued a statement and called a 3:30 a.m. Friday press conference to seal the deal before any party could back out.

    August 1, 2014 1 Photo

  • Taiwan web.jpg Gas explosions kill 24, injure 271 in Taiwan

    The fires were believed caused by a leak of propene, a petrochemical material not intended for public use, but the source of the gas was not immediately clear, officials said.

    July 31, 2014 1 Photo

  • Congress web.jpg Congress races to finish VA, highway bills

    House Speaker John Boehner accused Democrats of pursuing a “nutso scheme” of trying to seize on the border crisis to try and grant a path to citizenship to millions of immigrants living in the country illegally.

    July 31, 2014 1 Photo

  • Illinois Unemployment_Hass.jpg As U.S. job market strengthens, many don't feel it

    "If the economy is getting better, I'm not sure for whom. It certainly hasn't trickled down to me." — Douglas Hunter, who earned $14 an hour before the Great Recession and now works three days a week for $9.25 an hour, mopping floors and fixing fryers at McDonald's.

    July 31, 2014 1 Photo

  • House Obama Lawsuit.jpg Republican-led House approves lawsuit against President Obama

    Just a day before lawmakers were to begin a five-week summer recess, debate over the proposed lawsuit underscored the harshly partisan tone that has dominated the current Congress almost from its start in January 2013.

    July 31, 2014 1 Photo

  • Russia Putin web.jpg Sanctions could damage Russia

    The sanctions go further than earlier penalties — which had largely targeted individuals — by broadly limiting the trade of weapons and of technology that can be used in the oil and military industries. The EU also put its capital markets off-limits to Russian state-owned banks.

    July 31, 2014 1 Photo

  • Mideast Libya web.jpg Thousands flee to Tunisia to escape Libya fighting

    Many diplomats, including the U.S. ambassador, have pulled out of the country. With the interim government paralyzed, the fighting threatens the planned opening session of the newly elected parliament on Aug. 4.

    July 30, 2014 1 Photo

  • Obit Robert Drew web.jpg Cinema verite documentarian Robert Drew dies

    Starting in 1960 with “Primary,” Drew produced and sometimes directed a series of television documentaries that took advantage of such innovations as light hand-held cameras that recorded sound and pictures.

    July 30, 2014 1 Photo

  • Obama Ukraine Russia_Hass_W.jpg GOP-led House approves lawsuit against Obama

    The suit will contend that Obama has exceeded his constitutional powers in the way he has enforced the 2010 health care law.

    July 30, 2014 1 Photo

Featured Ads