This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Stocks Jump as Congress Gets Some Sense

Stocks in this article: ^DJI ^GSPC ^IXIC PXD ABT PEP BAC

NEW YORK (TheStreet) -- U.S. stocks surged Wednesday as a bipartisan deal by Senate Majority Leader Harry Reid and Minority Leader Mitch McConnell to raise the nation's borrowing limit and reopen government operations received cheers from the White House and Democratic and Republican House leadership.

The S&P 500 rose 1.4% to close at 1,721.54, all but ignoring Fitch Ratings decision to place the U.S. 'AAA' credit on rating watch negative. The Dow Jones Industrial Average jumped 1.4% to 15,373.83 while the Nasdaq advanced 1.2% to 3,839.43.

"There's obviously this palpable sense of relief," said Russ Koesterich, chief investment strategist at BlackRock in a phone interview. "Arguably, [Congress] did a little damage: fourth quarter is going to be a bit slower, you may have undermined consumer confidence more than the market is appreciating."

Congress is expected to pass a short-term resolution to assure that government remains open through January 15, and that the debt-ceiling is sufficiently increased to satisfy creditors through February 7, 2014. Reid said Congress needs to address the cost that the government shutdown and uncertainties about a default may have had on the U.S. economy.

"We have sent a message to Americans from every state and citizens of every country that the United States lives up to its obligations," Reid said. "Now Congress must return to its most important job - fostering economic growth and protecting middle-class families."

House Speaker John Boehner in a statement said his caucus would not block the bipartisan agreement reached in the Senate, and White House Press Secretary Jay Carney said President Obama applauded the deal.

In company news, the prospects of a deal helped push Bank of America (BAC - Get Report) shares up more than 2% after the bank reported it earned $2.5 billion or 20 cents a share in the third quarter, an increase from earnings of $340 million or flat results per share the same time a year ago.

PepsiCo (PEP - Get Report) rose more than 2% after the snack and beverages giant reaffirmed its 2013 high single digit earnings per share growth guidance of 7% after posting third-quarter earnings of $1.24 a share on revenue of $16.91 billion, versus the Wall Street target of $1.17 a share on sales of $17.02 billion. The company recorded an organic revenue decline of 1.5% at its Americas Beverages unit during the quarter but experienced an organic revenue increase of 7% at it Americas Foods business.

Abbott Laboratories (ABT - Get Report) was one of the biggest gainers in the S&P 500, surging more than 6% after the global healthcare company hiked its quarterly dividend by 57% to 22 cents a share and confirmed its 2013 earnings-per-share guidance range of $1.98 to $2.04, reflecting double-digit growth.

This, as Abbott beat third-quarter earnings estimates by four cents at 55 cents a share as the company reported continued improvements in its nutrition and diagnostics testing business.

Pioneer Natural Resources (PXD - Get Report) meanwhile surged about 6% as Wall Street analysts generally predicted a strong catalyst for shares of the oil and gas production company as it seeks to further unlock value at the massive Spraberry Wolfcamp shale field near Midland, Texas.

Homebuilder confidence in the market for newly built, single-family homes fell two points in October to a level of 55 from a downwardly revised reading of 57 in the previous month due to ongoing challenges relating to the cost and availability of labor and lots and uncertainty in Washington whereby the government shutdown has jammed up the approval pipeline for government backed mortgage loans, the National Association of Home Builders/Wells Fargo Housing Market Index showed Wednesday. Economists were expecting a level of 58.

The Federal Reserve's Beige Book report on Wednesday said it saw "modest to moderate" growth amid Congress' inability to fund the government.

The benchmark 10-year Treasury was jumping 17/32, diluting the yield to 2.673%.

-- Written by Andrea Tse and Joe Deaux in New York

>To contact the writer of this article, click here: Andrea Tse.>  X

Check Out Our Best Services for Investors

Action Alerts PLUS

Jim Cramer and Stephanie Link reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

Jim Cramer's protégé, David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
Try it NOW
Try it NOW
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

Jim Cramer's protégé, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,387.21 -291.49 -1.65%
S&P 500 2,029.55 -27.54 -1.34%
NASDAQ 4,681.4970 -90.2660 -1.89%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs