US stocks rebound as impasse enters fourth day
Stocks on the American exchange rebounded sharply amid a fourth consecutive day of partial government shutdowns. US stocks experienced a volatile week, as the ongoing budget impasse continues to weigh on investors.
Market participants ended the week more optimistic lawmakers will reach a deal to end the budget impasse before the October 17 deadline, when the US government will have exhausted its spending authority. At the moment, however, Democrats and Republicans remain divided on how to fund the government, with those opposed to President Barrack Obama’s Affordable Care Act divided on how to move forward. House Speaker John Boehner said he won’t allow the US to default on its debt, even if that means conceding to the president’s demand to allow a bipartisan House vote.
The Standard & Poor’s 500 clawed its way to 1,690.50, a gain of more than 0.7 percent, as market participants shrugged off the likelihood of another week of government closure. All ten of the S&P 500’s main industries advanced, helping the benchmark gauge trim its weekly loss to 0.1 percent after reaching as much as 1.3 percent earlier.
The Dow Jones Industrial Average moved up half a percent to 15,073.58, after a triple-digit loss sent it spiralling back down below 15,000 the previous day. All but six of the Dow’s members advanced, led by The Walt Disney Company (NYSE:DIS) , which gained 2 percent. The NASDAQ Composite edged up almost 0.9 percent to 3,807.75 after Facebook (NASDAQ:FB) jumped more than 3.7 percent on news it would sell mobile advertising space on its Instagram service.
With the October 17 budget deadline looming, some analysts are concerned both parties will fail to reach an agreement, which could lead to a default on America’s $16.7 trillion debt. It goes without saying a budget default is a much bigger concern for investors than a budget disagreement. Next week will test the resolve of Democrats and Republicans in avoiding what could be a decades-long catastrophe should the federal government default on its debts.
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