US stocks left afloat as congress reaches resolution
Stocks in the US were buoyed on the open as investors want to believe that congress will reach a resolution before the October 17th deadline to refund the treasury. Despite all of the back and forth in Washington and the lack of an agreement, stocks were higher, but as news trickled out during the session volatility continued to advance. Bank of America beat earnings along with Pepsi, which help boost stocks on the open. The S&P 500 was the best performing of the major indices closing up 1.38%.
Fitch credit rating agency placed US debt on negative credit watch, citing the failure of congress to increase the debt ceiling. Fitch had expected the debt ceiling to be raised prior to the October 17 deadline and is sounding the warning alarms. Moody’s, which retains a AAA rating believes the US will come through with an agreement and will pay the interest on all of its debt obligations.
The mission of the conservatives is to receive concessions eliminating the Affordable Care Act, in some way shape or form. Their mission seems clear and they are willing to put the entire capital market at risk to eliminate Obamacare. They have shown very little willingness to negotiate, but their goal is clear and they will act to destroy the credit of the United States unless they get their way.
In corporate news, Bank of America (NYSE:BAC) reported that quarterly profit rose to $2.5 billion, or 20 cents a share, from $340 million, in the period a year earlier, which was weighed down by litigation expenses and other charges. Excluding charges, the bank reported $22.2 billion in revenue in the third quarter, a slight drop compared with $22.5 billion in the same period a year ago.
Additionally, PepsiCo (NYSE:PEP) said earnings per share came in at $1.24, beating expectations for earnings of $1.17 per share. The firm’s third quarter revenue came in at $16.91 billion, missing estimates for revenue of $16.96billion.
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