The broad indices ended mixed, but bank stocks fared well, with the KBW Bank Index (I:BKX) rising 0.4% to 61.47 and all but four of the 24 index components ending with gains.
On Day 8 of the federal government's partial shutdown, investors turned their attention away from a possible U.S. default on debit payments to President Obama's nomination of Janet Yellen to chair the Federal Reserve after current Fed Chairman Ben Bernanke steps down in January.
Yellen is a former CEO of the Federal Reserve Bank of San Francisco and has served as vice chair of the Federal Reserve Board since 2010.Obama had previously favored nominating former U.S. Treasury secretary Lawrence Summers to be the next Fed chairman, but Summers withdrew his nomination last month after it became apparent that several Democratic members of the Senate Banking Committee would oppose his nomination. That nomination in part reflected a lack of comfort with Summers' more "hawkish" approach to monetary stimulus than the approach favored by Bernanke and Yellen. Any member of the Senate Banking Committee can block Yellen's nomination from reaching the Senate floor for a vote. One committee member who may put up significant opposition to Yellen's nomination is Richard Shelby (R., Ala.), who voted against confirming Yellen's as Fed vice chair in 2010. A spokesperson for the senator said in an email exchange that "Sen. Shelby has real concerns about her proclivity to print more money and her record as a bank regulator, which has been found wanting. However, he believes that we should let the confirmation process play out, and looks forward to discussing her record at the upcoming hearing." Yellen's nomination seemed to be an opportunity for Washington politicians to show some civility, while in the middle of a bitter battle over the federal budget and an even more important fight over raising the government's $16.7 trillion debt limit. Treasury Secretary Jack Lew has warned the government may run out of money to pay its bills -- including debt payments -- after Oct. 17. Some analysts have said the Treasury can probably make its payments until Oct. 31.
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