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S&P 500 sets new record as Fed speculation deepens

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S&P 500 sets new record as Fed speculation deepens

The Standard & Poor’s 500 set a new record high one day after bipartisan Senate leaders reached an accord to end the budget impasse and raise the debt ceiling. Speculation is growing the Federal Reserve will maintain the pace of its monthly asset purchases after the 16-day impasse resulted in the loss of $24 billion to the US economy. The loss shaves 0.6 percent from fourth quarter GDP, according to S&P’s Rating Service.

Market participants are breathing a sigh of relief after United States Congress averted a devastating default. The focus has shifted back to the markets, with investors speculating about the central bank’s next course of action. The Federal Open Market Committee will meet on October 29 for the second-last time this year to discuss economic recovery and the pace of monthly bond buying. The Fed maintains economic growth was ‘modest to moderate’ during the partial government shutdown.

The Standard & Poor’s 500 set an all-time high one month after its previous record. The benchmark index advanced more than 0.6 percent to 1,733.15 after gaining more than two percent during the government shutdown.

The Dow Jones Industrial Average was unable to rally on the success of American Express, which rallied more than 5.1 percent on better-than-expected earnings. The Dow fell 2 points to 15,371.70 after IBM (NYSE:IBM) and UnitedHealth Group (NYSE:UNH) fell at least 5.08 percent. IBM sank after company sales declined for the sixth consecutive quarter. In total, 23 of the Dow’s 30 members reported gains.

The NASDAQ Composite advanced more than 23 points to 3,863.15, with Microsoft(NASDAQ:MSFT) and Apple (NASDAQ:AAPL) advancing at least 0.63 percent. Apple climbed back above $500 a share on Wednesday.

The government shutdown has delayed several important pieces of economic data, including the Labor Department’s September payrolls. The government has yet to announce a timetable for their release. Market participants have relied on the data wire to gauge the pace of economic growth and determine the Federal Reserve’s next course of action.

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