U.S. stocks advanced, with the Standard & Poor’s 500 Index compensating for weekly decline, as optimism grew that the lawmakers would reach a deal to end the budget impasse and avoid a default on the federal debt.
The S&P 500 added 0.7% to 1,690.50 at 4 p.m. in New York. The Dow Jones Industrial Average added 76.10 points, or 0.5%, to 15,072.58. About 5.2 billion shares changed hands on U.S. exchanges, 9.6% below the three-month average.
“There’s a working presumption that this is fundamentally theater and it’s going to work itself out favorably,” Mackintosh Pulsifer, vice chairman and chief investment officer of Fiduciary Trust Co. International in New York, said in a phone interview for Bloomberg. He helps oversee $15 billion. “There will not be a default, we’ll find some way to raise the debt ceiling, and government workers will go back to work. In a few weeks it’s not going to have any impact.”
John Boehner reiterated today that he won’t allow the U.S. to default on its debt, even if that requires Democratic votes as House Republicans met in Washington to find a solution to the budget impasse. Boehner later said reopening the government must start with negotiations and that he has no intention of ‘rolling over’ on spending concessions.
In corporate news, the most anticipated technology offering since Facebook, Twitter Inc. made public its S-1 prospectus yesterday and said it’s seeking to raise $1 billion. The documents suggested a valuation of $12.8 billion for the social service site.
Delta Air Lines Inc. gained 2.7% to a record $25.19, capping its ninth advance in the past 10 sessions. Chief Executive Officer Richard Anderson said at a conference in New York that the carrier is not seeing any travel decline from the government shutdown.
Lockheed Martin Corp. slumped 0.3% to $122.50. The largest U.S. government contractor said it has identified about 3,000 employees for furloughs on Oct. 7 because of the federal shutdown. The stock has dropped six straight sessions, the longest losing streak since June.
Union Pacific slid 1% to $153.90 after the railroad operator said it sees third-quarter earnings of $2.45 to $2.48 a share, compared with the average analyst forecast of $2.56. Operating revenue will increase as much as 4.5%, the company said, compared with a 7% gain predicted by analysts.