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Wall Street ends higher on optimism about U.S. debt-ceiling deal

EconomyOct 06, 2021 09:10PM ET
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© Reuters. FILE PHOTO: Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., September 29, 2021. REUTERS/Brendan McDermid

By Noel Randewich and Shreyashi Sanyal

(Reuters) - Wall Street ended higher on Wednesday as investors grew more optimistic that congressional Democrats and Republicans could reach a deal to avert a government debt default.

Top U.S. Senate Republican Mitch McConnell said his party would support an extension of the federal debt ceiling into December. This would head off a historic default that would exact a heavy economic toll.

"McConnell made some dovish comments about temporarily extending the debt ceiling," said Jay Hatfield, founder and portfolio manager at Infrastructure Capital Advisors. "That's going to be interpreted in the short-run as positive."

McConnell's offer could provide an off-ramp to a months-long standoff between President Joe Biden's Democrats and McConnell's Republicans, who had been expected on Wednesday to block a third attempt by Senate Democrats to raise the $28.4 trillion debt ceiling.

Stocks were lower for much of the session after a strong showing of private jobs in September fueled bets the Federal Reserve could start reining in monetary stimulus soon.

The Dow Jones Industrial Average rose 0.3% to end at 34,416.99 points, while the S&P 500 gained 0.41% to 4,363.55.

The Nasdaq Composite climbed 0.47% to 14,501.91.

Mega-cap growth stocks Amazon (NASDAQ:AMZN) and Microsoft (NASDAQ:MSFT) both rose more than 1% after the benchmark U.S. 10-year Treasury yield retreated from three-month highs by early afternoon. [US/]

The ADP National Employment Report showed private payrolls increased by 568,000 jobs last month. Economists polled by Reuters had forecast a rise of 428,000 jobs.

"Positive labor market data comes with the implication that the Fed can tighten policy at a quicker pace. But the fact that hiring is up shouldn't be discounted — it's definitely a good thing in terms of recovery," said Mike Loewengart, managing director, investment strategy at E*TRADE Financial.

The more comprehensive non-farm payrolls data is due on Friday. It is expected to cement the case for the Fed's slowing of asset purchases.

Oil prices hit multi-year highs early, but crude prices retreated from those highs while the S&P 500 energy sector index slid over 1%, the weakest performer among 11 sector indexes.

American Airlines (NASDAQ:AAL) Group fell 4.33% after Goldman Sachs (NYSE:GS) cut its rating on the carrier to "sell" from "neutral".

Shares in steelmaker Nucor Corp (NYSE:NUE) dropped 2.75% after Goldman Sachs lowered its rating to "neutral" from "buy".

Declining issues outnumbered advancing ones on the NYSE by a 1.31-to-1 ratio; on Nasdaq, a 1.58-to-1 ratio favored decliners.

The S&P 500 posted 3 new 52-week highs and 9 new lows; the Nasdaq Composite recorded 31 new highs and 241 new lows.

Volume on U.S. exchanges was 10.6 billion shares, compared with the 11.0 billion average over the last 20 trading days.

Wall Street ends higher on optimism about U.S. debt-ceiling deal
 

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Comments (18)
Jo Pa
Jo Pa Oct 06, 2021 10:55PM ET
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Why not use the $3.5T 'infrastructure' money to just pay off the debt? Adding $3.5T to an annual $4T budget would require nearly doubling taxes to pay for it, when businesses are already struggling!!
Dave Jones
Dave Jones Oct 06, 2021 4:37PM ET
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more debt!!! yippee!!!!
Loudermilktits Loudermilktits
Loudermilktits Oct 06, 2021 4:37PM ET
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You understand nothing, yippee!!!
Frank Francone
Frank Francone Oct 06, 2021 4:22PM ET
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"Wall Street ends higher on nothing"
jason xx
jason xx Oct 06, 2021 4:16PM ET
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Republicans only offered extension for democrats to raise debt ceiling by themselves through reconciliation. Democrats already refused to do that so we got nowhere today. Just more tail chasing
Mitchel Pioneer
Mitchel Pioneer Oct 06, 2021 2:05PM ET
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Another miracle "recovery" for the BIGGEST INVESTMENT JOKE IN THE WORLD.  Fraud and criminal manipulation in broad daylight.
Edward Smyth
Edward Smyth Oct 06, 2021 2:05PM ET
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always dressed in suits! don't trust a single one of them. really you cannot manage your own money or future? pre 1913 the biggest joke didn't exist
Radium King
Radium King Oct 06, 2021 1:40PM ET
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Rate hike now
sal galeano
sal galeano Oct 06, 2021 1:20PM ET
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💩 is backwards when positive news scares investors.
MS MS
MS MS Oct 06, 2021 1:11PM ET
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Uhm Taper is a known quantity and apelled out to begin in November
TheEnd IsNigh
TheEnd IsNigh Oct 06, 2021 12:50PM ET
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Drop is due to ridiculously surging energy prices, especially natural gas, in Europe which is having and will have a major impact on industry and the general population this winter.
Mitchel Pioneer
Mitchel Pioneer Oct 06, 2021 12:50PM ET
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Losses slowly being maneuvered out of the system, flagrant as ever.  More losses reversed in the biggest investment joke in the world.  Assume the proper position America.
Helen Anceriz
Helen Anceriz Oct 06, 2021 12:50PM ET
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rinse and repeat
Tony Huynh
Tony Huynh Oct 06, 2021 12:36PM ET
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We already dropping before ADP jobs release. Idk why they use that as the reason for the drop lol
John Avenetti
John Avenetti Oct 06, 2021 12:36PM ET
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because no one knows anything it's all a guess. assigning reasons for action when truly no one has any idea
ben sc
ben sc Oct 06, 2021 12:15PM ET
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they can't taper or raise rates until they sell 3.5T in debt at lower yields. the Fed has essentially stated that they're okay with inflation.
Millennial Metals
Millennial Metals Oct 06, 2021 12:00PM ET
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They will never taper. Hyperinflation is coming
Chris Sundo
Chris Sundo Oct 06, 2021 11:37AM ET
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Sure, guys, whatever stories it takes to get us down to the July lows for ALL tickers. Let's LEAN ON the SELL BUTTON hard until we get there, TEST IT GOOD, and then get it over with! Finish the job This week or next week?
Khwarizmi Algebra
Khwarizmi Algebra Oct 06, 2021 9:54AM ET
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Brent oil has been on same price for the last 3 days. So just today investors become worry. Emmm ok
michael brennick
michael brennick Oct 06, 2021 7:43AM ET
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Let's Go Brandon!!
Bill Pulak
Bill Pulak Oct 06, 2021 6:56AM ET
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Oh really is that why its down? Yet these worries didnt exist yesterday? Cmon man!!!!!
Gershom Zvi
Gershom Zvi Oct 06, 2021 6:49AM ET
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Gas stocks are up as usual
 
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