U.S. stock markets gained after the Senate reached an agreement to end the government shutdown and increased the debt ceiling before the deadline tomorrow. The House of Representatives and the Senate will vote on the deal later today.
White House press secretary Jay Carney said President Barack Obama supports the deal, which provides funding to the government until January 15, 2014. It would also extend the debt limit until February 7. Carney said that the deal “achieves what’s necessary” to reopen the government and to “remove the threat of economic brinkmanship” that could lead to a default.
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“We leave parliamentary procedures to the Congress, but we obviously hope that each house will be able to act swiftly. We are already on day 16 of a wholly unnecessary shutdown of government,” said Carney.
On the other hand, Ben Hart, a research analyst at Haverford Trust Co told Bloomberg, “Investors are relieved that it looks like we’re not going to go over the cliff. It takes the worst case scenario off the table.”
Yesterday, Fitch Ratings placed the “AAA” credit rating of the United States under “rating watch negative” for a possible downgrade if lawmakers fail to raise the government debt ceiling on time. The ratings agency said political brinkmanship and reduced financial flexibility increase the risk of the United States towards default.
Meanwhile, The Federal Reserve said the economic growth of the country remains “modest to moderate. Investments of business and consumer spending grew based on the Fed’s Beige Book business survey.”
- Dow Jones Industrial Average (DJIA)- 15, 373.83 (+1.36%)
- S&P 500- 1,721.54 (+1.36%)
- NASDAQ- 3,839.43 (+1.20%)
- Russell 2000- 1,092.49 (+1.19%)
- EURO STOXX 50 Price EUR- 3, 015.40 (+0.36%)
- FTSE 100 Index- 6,571.59 (+0.34%)
- Deutsche Borse AG German Stock Index DAX- 8,846.00 (+0.47%)
Asia Pacific Markets
- Nikkei 225- 14,467.14 (+0.18%)
- Hong Kong Hang Seng Index- 23,228.33 (-0.46%)
- Shanghai Shenzhen CSI 300 Index- 2, 421.37 (-1.87%)
Stocks in Focus
The stock price of Abbott Laboratories (NYSE:ABT) gained 6.50% to $35.90 per share after the company reported third quarter earnings results that beat the consensus estimate of Wall Street analysts. The company also increased its dividend by 57% to $0.22 per share. The company posted $873 million net income or $0.55 earnings per share from its remaining businesses that were not part of its drug business spin off. The company maintained its full-year guidance in the range of $1.98 to $2.04 per share.
Mattel, Inc. (NASDAQ:MAT) gained 1% to $41.97 a share after the largest manufacturer of toys reported a 16% gain in earnings, which was driven by strong sales of its Barbie and American girl brand. The company posted $1.21 earnings per share on $2.21 billion revenue.
On the other hand, the stock value of Stanley Black & Decker, Inc. (NYSE:SWK) declined by $14.26% to $76.75 per share after the company cut its full-year earnings guidance due to weak improvements in margins of its security business, and slow down in emerging markets.