Stocks Buoyed by a Potential Deal
Stocks in the US started off on a strong note, as investor sentiment increases prior to the House Republicans visiting the President Thursday to discuss a continuing resolution that could put the government back to work. Jobless claims were one of the few economic data points that the government released, which gave market participants something to chew on. Stocks continued to rally for most of the session settling on their highs with the Dow Jones Industrial up 323 points.
House Republicans held talks with President Obama today as Washington looks for a deal on the federal budget and debt ceiling. The GOP and Democrats yesterday suggested the possibility of a short-term increase in the debt limit in order to provide time for wider budget talks, with Paul Ryan and Obama among those calling for such a move. Hopes of a solution to the impasse have helped boost U.S. stock futures.
In corporate news, technology shares moved higher while iGATE (NASDAQ:IGTE) reported third quarter EPS of $0.46, higher than the analyst consensus of $0.42. It reported revenues of $293.4 million, which beat analyst consensus of about $289 million.
In US economic news, Initial jobless claims, for the week ended October 5 was jumped from 308,000 to 374,000 which was much worse than expected, while the 4-week moving average jumped 20,000. The Department of Labor stated that approximately 50% of the increase in claims came from California computer issues. The government shutdown likely generated the other 50% of the jump in claims. The data is difficult to place into context given the government shutdown. It is very difficult for anyone to know the accuracy of the data and where the real data stands.
The FOMC minutes that were out yesterday were a bit dated. The closure of the government, the soft private sector data that has been released, which includes the ADP, ISM, auto sales and consumer confidence and the fiscal uncertainty, makes the slowing of the Fed’s asset purchases this year unlikely.
Sorry. No data so far.