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TheStreet Open House

Bank Stocks Lead on 'Government Restart Day'

The S&P 500 (SPX.X) ended with a gain of 0.7% and the NASDAQ Composite was up 0.6%, after the federal government resumed full operations on Thursday. The stock market had closed with strong gains on Wednesday, after Senate Majority Leader Harry Reid (D., Nev.) announced a compromise agreement with Senate Minority Leader Mitch McConnell (R., Ken.) to fully fund government operations and raise the federal debt limit. The Senate and the House of Representatives quickly passed the legislation Wednesday night.

President Obama quickly signed the legislation and said at the White House Wednesday night that "We can begin to lift this cloud of uncertainty and unease from our businesses and from the American people."

Earlier Wednesday night, Obama said "with the shutdown behind us and budget committees forming, we now have an opportunity to focus on a sensible budget that is responsible, that is fair, and that helps hardworking people all across this country."

"One of the things that I said throughout this process is we've got to get out of the habit of governing by crisis," the president said. "And my hope and expectation is everybody has learned that there is no reason why we can't work on the issues at hand, why we can't disagree between the parties while still being agreeable, and make sure that we're not inflicting harm on the American people when we do have disagreements."

The Department of Labor on Thursday said initial unemployment claims for the week ended Oct. 12 totaled 358,000, falling 15,000 from the previous week's 373,000. The four-week moving average for initial jobless claims was 336,500, increasing 11,750 from the previous week's revised average of 324.750.

The KBW Bank Index (I:BKX) on Thursday rose 0.9% to close at 65.28, with all but three of the 24 index components ending with gains.

More Bank Earnings

Third-quarter earnings for large banks, as expected, show a considerable decline in mortgage banking income, along with considerable declines in trading revenue for the largest players. On a brighter note, several regional lenders with footprints in the Midwest reported solid loan growth, including Huntington Bancshares (HBAN), U.S. Bancorp (USB) and KeyCorp (KEY).

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