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Stocks hit record as senators reach deal to end shutdown

Stock MarketsJan 22, 2018 04:25PM ET
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© Reuters. FILE PHOTO: Traders work on the floor of the New York Stock Exchange shortly after the opening bell in New York

By Chuck Mikolajczak

(Reuters) - U.S. stocks advanced on Monday as each of Wall Street's main scored records in the wake of a deal by U.S. senators to end the federal government shutdown.

Legislation to renew federal funding to the government cleared a procedural hurdle in the Senate and was expected soon to pass votes in the Senate and House of Representatives, allowing government to re-open through Feb 8.

"You would think something like the threat of a government shutdown or an actual government shutdown would serve as a catalyst to spook some weaker holders out of the market," said Eric Marshall, portfolio manager and director of research at Hodges Capital Management in Dallas, Texas.

"That hasn't happened, which speaks to underlying strength of what we're seeing right now in equity markets."

Earnings growth of 12.4 percent is expected for the quarter, according to Thomson Reuters data. Of the 55 companies in the S&P 500 that have reported earnings through Monday morning, 80 percent have topped expectations, well above the 72 percent beat rate for the past four quarters.

The Dow Jones Industrial Average (DJI) rose 142.88 points, or 0.55 percent, to 26,214.6, the S&P 500 (SPX) gained 22.67 points, or 0.81 percent, to 2,832.97 and the Nasdaq Composite (IXIC) added 71.65 points, or 0.98 percent, to 7,408.03.

Halliburton Co (N:HAL) climbed 6.40 percent after posting a much bigger-than-expected quarterly profit in the fourth quarter, benefiting from a shale-driven surge in U.S. oil production.

The Nasdaq biotech index (NBI) rose 3.15 percent to notch its best day since June 21 after a flurry of merger activity in the sector with French drugmaker Sanofi (PA:SASY) and U.S.-based Celgene (O:CELG) splurging a combined total of more than $20 billion.

Shares in U.S. hemophilia specialist Bioverativ (O:BIVV) soared 61.89 percent after Sanofi agreed to buy the company for $11.6 billion.

Juno Therapeutics (O:JUNO) jumped 26.83 percent after Celgene agreed to buy the biotech for about $9 billion in cash.

In other M&A news, AIG (N:AIG) said it would buy reinsurer Validus Holdings (N:VR) for $5.56 billion, sending the target's shares up 44.03 percent.

Industrial stocks were one of the few laggards, as woes continued for General Electric (N:GE), down 0.55 after BofA-Merrill Lynch downgraded its stock. GE fell below $16 for the first time since 2011 and is down nearly 8 percent for the year.

Shares of Netflix Inc (O:NFLX), a major contributor to the recent stock rally, closed up 3.23 percent ahead of its quarterly results and added to gains in extended trading after its quarterly numbers were released.

Advancing issues outnumbered declining ones on the NYSE by a 1.70-to-1 ratio; on Nasdaq, a 1.38-to-1 ratio favored advancers.

The S&P 500 posted 123 new 52-week highs and 3 new lows; the Nasdaq Composite recorded 202 new highs and 16 new lows.

Volume on U.S. exchanges was 6.56 billion shares, above the 6.34 billion average for the full session over the last 20 trading days.

Stocks hit record as senators reach deal to end shutdown
 

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WANDERLUST srt
WANDERLUST srt Jan 22, 2018 4:31PM ET
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The art of the deal wins again.  Good thing we have a real president this time that can take care of business instead of that socialist before.
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Sarvar Bhat
Sarvar Bhat Jan 22, 2018 9:18AM ET
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Nothing as such is going to happen. As Trump already said lately that markets will keep going up and we will win election again. Even if it corrects half a percent or 1 percent at the max. It will go up again.
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Tah Tange
TradeMac Jan 22, 2018 9:18AM ET
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Exactly!! hows your 401k looking?
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