US stocks rally on Yellen nomination
US stocks rallied after posting their biggest two-day loss since June following the nomination of Janet Yellen as the next Chair of the Federal Reserve. The markets are optimistic the dovish Yellen won’t rush to unwind record stimulus once she assumes the leadership role in February 2014.
The US government remains in partial shutdown mode as lawmakers work to piece together a solution before the October 17 deadline. Republicans and Democrats have been at odds about how to end the budget impasse, now entering its tenth day. President Barrack Obama said he’s open to negotiations with Republicans on a range of health-related topics if they vote to raise the debt ceiling. Obama has appealed to House Speaker John Boehner several times to allow a bipartisan House vote that wouldn’t affect the 2010 Affordable Care Act and get the government back in session. Boehner confirmed House Republicans will send a small team of negotiators to the White House on Thursday.
Stocks on the American exchange rebounded, despite another soft day for the technology sector. The Standard & Poor’s 500 advanced less than 0.1 percent to 1,656.40, after falling more than 2 percent on Monday and Tuesday. The Dow Jones Industrial Average jumped 26 points to 14,803.00 after two days of triple-digit losses. In total, 15 of the Dow’s 30 members reported gains, led by AT&T, which moved up 1.93 percent. Dow newcomers Goldman Sachs (NYSE:GS) and Nike (NYSE:NKE) advanced at least 0.87 percent.
The NASDAQ Composite was unable to reverse its downward spiral after falling 2 percent on Tuesday. The index dropped another half percent to 3,677.78.
In other news, most Fed officials expect to see a bond tapering this year, according to the minutes from the September FOMC policy meetings. The FOMC unexpectedly refrained from scaling back bond purchases at the September 17-8 meetings, a decision that sent S&P 500 to a new record high.
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