U.S. stocks rose sharply Thursday, as lawmakers reached an agreement that will at least temporarily avert a breach of the U.S. debt ceiling and a government default.
- The Dow rose +337.95 or +0.98%
- The S&P 500 advanced +36.28 or +0.83%
- The Nasdaq was up +152.11 or +1.05%
Stocks extended early gains after Senate Majority Leader Chuck Schumer, D-New York, said in a floor speech that top Democrats and Republicans in the chamber had “reached agreement to extend the debt ceiling through early December, and it’s our hope that we can get this done as soon as today.”
U.S. Treasury Secretary Janet Yellen had previously warned that a breach of the debt ceiling could occur as early as Oct. 18 unless Congress took action.
Sen. Mitch McConnell, the minority leader and Kentucky Republican, had effectively ended near-term worries around the debt ceiling on Wednesday by announcing that Republicans would not filibuster an increase. The move only gives two more months of breathing space, but lawmakers say that will provide enough time for critical negotiations on spending to take place.
Talks in Switzerland between U.S. and Chinese officials set the stage for reports that U.S. President Joe Biden and Chinese leader Xi Jinping will meet virtually before the end of the year. Hong Kong’s Hang Seng stock index surged 3.1%, its strongest one-day surge since July 29.
Energy prices also continued to cool off, reacting to Russian President Vladimir Putin’s statement that gas producer Russia would seek to stabilize prices. The lead U.K. natural-gas contract reversed an early fall to climb 2.3%.
The Labor Department said weekly initial claims for unemployment benefits fell 38,000, to 326,000, in the week ended Oct. 2. The September employment report is due Friday morning.
U.S. stock indexes have been volatile in October on concerns about the federal debt ceiling and a rise in bond yields as inflation fears have grown while investors await the third quarter corporate earnings reporting season starting next week.
- Shares of Levi Strauss & Co. rose almost 9% after the jeans company late Wednesday beat Wall Street estimates for the quarter and raised its outlook for the year.
- Twitter Inc. late Wednesday said it was selling MoPub, a mobile-ad network, for $1.05 billion in cash to marketing-software company AppLovin Corp. Twitter shares were up 4.6%, while AppLovin jumped 9.1%.
- Shares of Rocket Lab USA Inc. rose 9.4%, after an announcement late Wednesday that NASA signed on with the company to demonstrate the U.S. agency’s Advanced Composite Solar Sail System, or ACS3.
- Despite missing on revenue for the most recent quarter, investors looked through the smoke of cannabis firm Tilray and the stock was up 2.8%.
- The U.S. oil benchmark reversed an early loss to rise 0.97% on the New York Mercantile Exchange.
- Gold futures were down 0.2%.