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Stocks Shrug Off Government Shutdown and Notch Up Gains

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Stocks Shrug Off Government Shutdown and Notch Up Gains

Stocks in the US got off to a positive start on the first day on the 4th quarter after the US government closed non-essential operations for the first time since 1996.  At 12AM EST on Tuesday, the US government shut down as there was not funding for discretionary operations.  The House and Senate were unable to pass a continuing resolution, as the Senate wants a clean bill, where the House is interested in a bill that defunds the Affordable Care Act.  The Nasdaq 100 index closed near the session highs, led by a 2.4% surge in Apple (NASDAQ:AAPL) .

The situation is difficult for the congress.  House member were voted to go to Washington to eliminate the Affordable Care Act, and they are sticking to their guns.  At the same time, the US voted in a President that ran on the Affordable Care Act, and the administration looks at their victory as a mandate.  Both sides are digging their heels in which does not bode well for government workers who have been furloughed because of a government shutdown.

Metals and Mining stocks were dragged down by a decline in precious metals prices. Gold for December delivery fell sharply today losing $22.80, or 1.7% to $1304.20 per ounce, this despite its traditional role as a safe-haven investment in times of uncertainty. Losses are across the sector, but the biggest losers include Newmont Mining (NYSE:NEM) , which generates 90% of its revenue from gold, Gold Fields (NYSE:GFI) , which hit a new 52-week low at the open, and Freeport McMoRan (NYSE:FCX) .

Apple’s shares bounced off of the 50-day moving average and are poised to test resistance near 500.  Momentum on the stock is flat with the MACD printing near the zero index level.  The RSI is printing near 55, which is in the middle of the neutral range.

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