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US stocks closed at October highest amid debt ceiling negotiations

stock_followingU.S. stocks climbed Friday, with Standard & Poors 500 reaching 20 days highest level, on investors optimism that lawmakers were making progress toward an agreement on raising the debt limit to avoid a default.

The Dow Jones Industrial Average gained 111.04 points, or 0.7%, to 15,237.11. The S&P 500 added 10.64 points, or 0.6%, to 1,703.20 to end at its highest close since Sept. 20. Both benchmarks broke a two-week losing streak this past week. The Nasdaq Composite Index added 31.13 points, or 0.8%, to 3791.87. The tech index erased weekly heavy losses.

The moderate gains pointed out investors were increasingly optimistic that a deal would be agreed upon from Washington. On Friday, House Republicans and the Obama administration began a second day of negotiations over a plan that could extend the nations borrowing authority for six weeks.

“We are picking up smoke signals that there are constructive talks,” Jim Russell, who helps oversee $112 billion as a senior equity strategist for US Bank Wealth Management, said by phone to Bloomberg. “It doesn’t take much imagination to see that a framework is coming together for a temporary extension of the budget ceiling, and then negotiations to reopen the government as early as next week. We do think that things are moving forward.”

In corporate news, JP Morgan Chase & Co. reported, on Friday, its first quarterly loss under Chief Executive Officer Jamie Dimon after taking a $7.2 billion charge for legal expenses. However, earnings on an adjusted basis still beat analysts’ estimates. The shares fell only 1 cent to $52.51.

Wells Fargo & Co. also fell 1 cent, to $41.43. While profit rose in the third quarter, the largest U.S. home lender posted declines in revenue.

Johnson & Johnson added 1.9% to $89.45 leading the biggest gainers in the Dow Jones average. The seller of health-care products was raised to “neutral” from “sell” by Goldman Sachs.

Gap declined 6.7%, the most since Dec. 4, to $36.83. The biggest U.S. specialty-apparel retailer said same-store sales fell 3 %, disapointing analysts estimations for 1.8% gain.

Micron Technology plunged in heavy volume as the memory-chip makers fiscal fourth-quarter earnings and revenue, which were above expectations, were clouded by gains resulting from the acquisition of Japans Elpida Memory. Microns share price dropped 8.6% although company has nearly tripled this year.

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