Despite the partial shutdown of the federal government, the stock markets in the United States rose as investors projected that impact of the situation to the economy is minimal.
In an interview with Bloomberg, Bruce Bittles, chief investment strategist at RW Baird & Co. opined that investors are no longer too concerned about the situation because it already happened in the past. Bittles said, “We have gone through this before, it’s not too surprising that investors aren’t frightened by it. The selling pressure lifted, and that has encouraged a lot of buyers here looking into buying the dip.”
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The equity gauged declined by 0.6% to 2.6% after legislators failed to agree on a federal budget yesterday. The Senate rejected the proposed budget bill of the lower chamber, which included a provision that would delay the implementation of the Obamacare for one year.
In addition to the federal budget, lawmakers are also wrangling on the issue of increasing the debt ceiling of the government. The Treasury department already made a warning that the extraordinary measures used to prevent exceeding the credit limit will be exhausted on October 17. The government will not have enough money to pay its bills, and failure to raise the debt ceiling could result to downgrade in the credit rating of the United States.
Meanwhile, data from the Institute for Supply Management showed that the manufacturing industry in the United States grew faster than expected.
- Dow Jones Industrial Average (DJIA)- 15,191.70 (+0.41%)
- S&P 500- 1,695.00 (+0.80%)
- NASDAQ- 3,817.98 (+1.23%)
- Russell 2000- 1,073.79 (-0.04%)
- EURO STOXX 50 Price EUR- 2, 933.02 (+1.38%)
- FTSE 100 Index- 6,460.01 (-0.03%)
- Deutsche Borse AG German Stock Index DAX- 8,689.14 (+1.10%)
Asia Pacific Markets
- Nikkei 225- 14, 484.72 (+0.20%)
- Hong Kong Hang Seng Index- 22,859.86 (-1.50%)
- Shanghai Shenzhen CSI 300 Index- 2, 409.04 (+0.59%)
Stocks In Focus
The stock price of Apple Inc. (NASDAQ:AAPL) rose by more than 2% to as much as $489.14 per share after activist investor Carl Icahn revealed that he pushed for a $150 billion shares buyback during his meeting with the tech giant’s CEO, Tim Cook on Monday night. The activist investor vowed to continue his discussion with the company regarding his proposal in three weeks. In an interview with CNBC, he emphasized that he will make sure that shareholders are well represented even if the board of the company does not approve his recommendations.
Ford Motor Company (NYSE:F) recorded its best September sales in six years after selling 185, 146 vehicles in the United States, an increase of 6%. The sales performance of the automaker beat the sales results of its peers in the auto industry. General Motors Company (NYSE:GM) reported an 11% sales decline in September. The stock value of Ford climb by 1.74% to $17.14 per share on Tuesday.
The stock price of Walgreen Company (NYSE:WAG) surged by 4.42% to $56.20 a share after reporting earnings results that beat the estimates of Wall Street analysts. The drugstore chained delivered $0.73 diluted earnings per share on $17.94 billion revenue. Analysts estimated that the company would report $0.72 earnings per share on $17.95 billion revenue. The drugstore chain projected that it will benefit from the implementation of the Obamacare.
Meanwhile, Netflix, Inc. (NASDAQ:NFLX) surged nearly 5% to $324.62 per share after MKM Partners analyst Ron Sanderson raised his price target for the stock from $285 to $370 per share. In a note to investors, Sanderson said the online video streaming company is capable of gaining customers in key international markets such as United Kingdom. He also said, “We think investors have growing confidence in the size of opportunity, strength of position and that management knows what they’re doing.”