U.S. stock markets gained strong momentum during the final hours of the trading session on Thursday as investors became more optimistic that lawmakers could reach an agreement to raise the debt ceiling prior to the deadline on October 17.
The Associated Press obtained information from sources that Republican House Speaker John Boehner will ask his fellow GOP lawmakers to vote for a short-term extension on the debt ceiling before the deadline.
A related report from Bloomberg indicated that Boehner’s proposal is to extend the government’s authority to borrow to be able to pay its bills until November 22. The White House issued a statement that President Barack Obama would support a short increase in the debt limit without “partisan strings attached,” but he prefers a longer extension.
White House press secretary, Jay Carney said, “The president is happy that cooler heads at least seem to be prevailing in the House, that there at least seems to be a recognition that default is not an option.”
The Republicans in the lower chamber will discuss their plan to Pres. Obama at the White House at 4.35 P.M. today. After the meeting, both parties will issue statements regarding the result of their discussion.
According to the Congressional Budget Office, the government will not be able to fulfill its payments including benefits, salaries, and interests on time starting between October 22 and October 31 if Congress fails to raise the debt limit. The government needs more than $30 billion incoming revenue to be able to pay its bills.
- Dow Jones Industrial Average (DJIA)- 14,803.37 (+0.18%)
- S&P 500- 1,656.48 (+0.06%)
- NASDAQ- 3,677.78 (-0.46%)
- Russell 2000- 1,046.15 (-0.11%)
- EURO STOXX 50 Price EUR- 2, 969.41 (+2.23%)
- FTSE 100 Index- 6,430.49 (+1.46%)
- Deutsche Borse AG German Stock Index DAX- 8,685.77 (+1.99%)
Asia Pacific Markets
- Nikkei 225- 14,194.71 (+1.12%)
- Hong Kong Hang Seng Index- 22,951.30 (-0.36%)
- Shanghai Shenzhen CSI 300 Index- 2, 429.32 (-0.99%)
Stocks in Focus
The shares of Netflix, Inc. (NASDAQ:NFLX) gained more than 5 percent to $303.99 a share, ending its three day losing streak after Needham & Co. analyst Laura Martin initiated coverage and recommended a buy rating for the stock. Martin emphasized that Netflix has the ability to increase its subscription prices by more than 100 percent because it is significantly cheaper than other TV options in the United States. The analyst has a $425 price target for the stock.
Time Warner Cable Inc (NYSE:TWC) surged 6 percent to $116.34 per share after the company announced the extension of its multi-year distribution agreement with Univision Communications Inc to deliver more content to the subscribers Time Warner Cable and Bright House Networks particularly to Hispanic audiences.
The stock price of UnitedHealth Group Inc. (NYSE:UNH) increased 3.42 percent to $73.83 a share after S&P raised its outlook on the credit rating of the company for stable to positive. The S&P expects UnitedHealth to improve its leading market positions and pricing flexibility. Analysts at Susquehanna also reiterated their positive rating with an $84 price target for the stock on expectations that UnitedHealth will be able to deliver strong results for the third quarter.
Citrix Systems, Inc. (NASDAQ:CTXS) declined by almost 12 percent to $58.75 per share after releasing its third quarter earnings pre-announcement that missed the consensus estimates of Wall Street analysts. The company said it expects to deliver $0.68 to $0.69 earnings per share on revenue of about $710 million to $712 million. The figures are lower than the $0.73 earnings per share on $737 million revenue consensus estimates.