Wall Street ends higher on optimism over US debt ceiling deal

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Traders work on the floor of the New York Stock Exchange (NYSE) in New York, United States, September 29, 2021. REUTERS / Brendan McDermid

  • ADP shows recovery in private jobs in US in September
  • American Airlines and Nucor fall on GS downgrades

Oct. 6 (Reuters) – Wall Street finished higher on Wednesday as investors grew more optimistic Democrats and Republicans in Congress could reach a deal to avoid a default on public debt.

U.S. Senate Republican Mitch McConnell has said his party will support an extension of the federal debt ceiling until December. This would avoid a historic default which would entail a heavy economic toll. Read more

“McConnell made accommodating comments on the temporary extension of the debt ceiling,” said Jay Hatfield, founder and portfolio manager at Infrastructure Capital Advisors. “This is going to be interpreted as positive in the short term.”

McConnell’s offer could provide an exit ramp to a months-long standoff between Democrats under President Joe Biden and McConnell’s Republicans, who were due to block a third attempt by Senate Democrats to raise the debt ceiling by 28 on Wednesday. , $ 4 trillion.

Shares were down for much of the session after the strong presence of private jobs in September fueled bets that the Federal Reserve may soon begin to dampen monetary stimulus.

Unofficially, the Dow Jones Industrial Average (.DJI) rose 0.3% to end at 34,417.98 points, while the S&P 500 (.SPX) gained 0.41% to 4,363.62.

The Nasdaq Composite (.IXIC) rose 0.47% to 14,501.91.

Amazon and Microsoft mega-cap growth stocks both rose after the benchmark 10-year U.S. Treasury yield fell from three-month highs early in the afternoon.

ADP’s national employment report showed private payrolls increased by 568,000 jobs last month. Economists polled by Reuters predicted an increase of 428,000 jobs. Read more

“The positive labor market data implies that the Fed may tighten policy faster. But the fact that hires are on the rise should not be ignored – it is certainly a good thing in terms of the recovery,” said Mike Loewengart, Managing Director. , investment strategy at E * TRADE Financial.

More comprehensive data on non-farm wages is expected on Friday. This should strengthen the case for slowing asset purchases by the Fed.

Oil prices hit multi-year highs early on, but crude prices retreated from those highs as the S&P 500 Energy Sector Index (.SPNY) slipped 1%, the lowest of 11 sector indices.

American Airlines Group (AAL.O) fell after Goldman Sachs downgraded its rating on the carrier to “sell” from “neutral.”

Shares of steelmaker Nucor Corp (NUE.N) fell after Goldman Sachs downgraded its rating to “neutral” instead of “buy”.

Additional reports from Shreyashi Sanyal, Devik Jain and Sruthi Shankar in Bengaluru; Editing by Saumyadeb Chakrabarty, Maju Samuel and David Gregorio

Our standards: Thomson Reuters Trust Principles.


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