Bloomberg Stocks soar as House Republican leaders plan to back a six-week debt-ceiling increase on Day 10 of the shutdown. NEW YORK (MarketWatch) — U.S. stocks jumped on Thursday, positioning Wall Street for its second-best session this year, as House Republican leaders proposed a temporary fix to the budget standoff, lessening the odds of a U.S. default a week before U.S. borrowing authority lapses.
The White House on Thursday called encouraging a Republican plan to hike the debt ceiling for six weeks with no policy strings attached, reducing the danger of a U.S. default.
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"Nobody gets everything they want," House Speaker John Boehner told a news conference Thursday. The Ohio Republican said his party would be offering the temporary hike in the debt limit in exchange for talks.
"It's my understanding that discussions are going on in that theatrical place we call Congress now," said Randy Frederick, managing director of active trading and derivatives at Charles Schwab.
At or near session highs, the Dow Jones Industrial Average (DJIA) was on track for its first close above 15,000 in four days, rising 228.24 points, or 1.5%, to 15,031.22, with athletic-apparel maker Nike Inc. (NKE) pacing gains that included all but two of its 30 components.
The S&P 500 index (SPX) advanced 26.63 points, or 1.6%, to 1,683.03, with financials pacing gains that extended to all of its 10 major industry groups.
The CBOE Volatility Index, or VIX (VIX) , fell 2.79 points, or 14%, to 16.81. The gauge of investor sentiment on Wednesday climbed above 21, reflecting "an increase in uncertainty but not panic by any stretch," said Frederick. "If investors were pricing in a real possibility of a default, the VIX could be at 30 or 40," he added, referring back to the spring of 2011, "when we had the last big debt-ceiling debate" and the VIX ran up to 31.
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Optimism on Wall Street Polya Lesova takes a look at today's market action, including three stocks to watch. Photo: Getty Images.
Notable gainers included shares of electronics retailer Best Buy Co. Inc. (BBY) , up 6.6%.
Citrix Systems Inc. (CTXS) led S&P 500 decliners, off 11% after the cloud-computing company late Wednesday warned its third-quarter revenue and profit would come in below expectations.
The Nasdaq Composite (COMP) gained 68.22 points, or 1.9%, to 3,745.99.
For every share falling, not quite half a dozen gained on the New York Stock Exchange, where 395 million shares traded as of 2:20 p.m. Eastern. Composite volume neared 2.2 billion.
The yield on the 10-year Treasury note (10_YEAR) used to determine mortgage rates and other consumer loans climbed 3 basis points to 2.691%.
"I've been quite surprised that the interest rate hasn't risen much while this has been going on. I'm a bit puzzled by how the 10-year has taken this in stride pretty nicely," said Frederick of the bond market's reaction to the long-running standoff on Capitol Hill.
The dollar (DXY) advanced against the currencies of major U.S. trading partners including the Japanese yen (USDJPY) but excluding the euro (EURUSD) . Energy costs rose, with futures (CLX3) pricing a barrel of crude at $103.02, up $1.40, or 1.4%.
Gold futures (GCZ3) lost $8.80, or 0.7%, to $1,298.40 an ounce.
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Also Thursday, Treasury Secretary Jack Lew testified before the Senate Finance Committee, warning lawmakers that failing to hike the nation's debt limit by Oct. 17 might endanger Social Security and Medicare checks.
And, the Labor Department reported the number of Americans filing for initial jobless benefits jumped to 374,000 last week, with the larger-than-expected rise largely reflecting computer glitches in California.
"Given the chaos within prior and now current readings, we'll take this with a pinch of salt," Andrew Wilkinson, chief economic strategist at Miller Tabak & Co. LLC, wrote in emailed commentary.
"The rise in claims is the largest since Hurricane Sandy about a year ago and lifts the headline to the most since March. It will now take several weeks to shake out the impact of the shutdown leaving investors guessing precisely how much the private sector is feeling its impact," he said.
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