Stocks Gain on Bet for Washington Deal
NEW YORK (TheStreet) -- U.S. stocks advanced Tuesday led by Netflix (NFLX) and Walgreens (WAG) as investors embraced signs of growth in manufacturing while betting that House Republicans will eventually cut a deal with the Democrat-led Senate to end the government's partial shutdown.
President Barack Obama, in a speech from the White House's Rose Garden, called on Republican leaders in the House of Representatives to drop their demand that funding be cut from the Patient Protection and Affordable Care Act, passed by Congress and signed by the president 2010, as a condition for enacting a budget.
Obama said he wouldn't give in to demands from "one faction, of one party, of one house of Congress in one branch of government."U.S. investors seemed to shrug at the political impasse, the governing by crisis that has become commonplace during Obama's term as Republicans have held firm to a strategy of obstructionism. Rather than viewing the shutdown as an ominous sign economic weakness, investors appeared heartened by a report from the Institute for Supply Management that its manufacturing index rose to 56.2 for September from 55.7 in August, coming in above the 55 level expected by economists on average. "Lawmakers will eventually 'kick the can' on the fiscal issues and the concerns ... may give way to a resolution that powers a comeback for U.S. stocks later this year, as we saw in 1967," Jeffrey Kleintop, chief market strategist at LPL Financial Corp. in Boston said in an investor note. LPL Financial has been overseeing a total of $396.7 billion in advisory and brokerage assets as of June 30, 2013. Netflix surged 5% to $324.62 as MKM Partners increased its price target amid a ratings upgrade to $370 from $285. MKM Partners reasserted its Buy rating on the view Netflix's international subscriber numbers will be higher than expected. Netflix will report third-quarter 2013 financial results on October 21. Walgreens jumped 4.5% to $56.24 as the largest U.S. drugstore retailer posted an 86% increase in profits for its fiscal fourth-quarter on revenue boosted by customer-loyalty card sales. AT&T (T) shares were gained 0.4% to $34.06 after the telecommunications provider said it plans to deploy a fiber-broadband network in Austin, Texas that will deliver speeds of up to 1 gigabit per second. The company said it's targeting a December launch, which will initially feature speeds of up to 300 megabits per second, which AT&T says will be the fastest upstream and downstream internet speeds available to consumers from any Austin broadband provider. AT&T's fiber move into Austin could give the company a head start ahead of Google (GOOG) which plans to bring its high-speed fiber-optic service to the city in 2014. Google and AT&T are both aiming to rollo-ut their 1-gigabit services in Austin by mid-2014. Separately, Google shares were gaining more than 1% to $884.80 as the search giant appears to be making significant progress in resolving its antitrust dispute with the European Union as the EU's competition chief says that the company has offered to modify how it displays Internet search results, Reuters reported. The benchmark 10-year Treasury was down 12/32, boosting the yield to 2.655%. Follow @atwtse --Written by Andrea Tse in New York >To contact the writer of this article, click here: Andrea Tse.>
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