NEW YORK (TheStreet) -- U.S. markets moved higher Thursday to post an all-time high as investor relief that lawmakers avoided a default on the country's debt combined with prospects that the Federal Reserve is unlikely to curtail its stimulus program after a weaker-than-expected national jobs report.
The S&P 500 gained 0.67% to close at 1,733.15, also eclipsing the benchmark's record intra-day high of 1,729. The Dow Jones Industrial Average slipped 0.01% to 15,371.65. The Nasdaq rose 0.62% to 3,863.15.
President Obama signed legislation just past midnight that raises the debt ceiling through February 7 and secures funding to keep the government open until January 15. Anything past that date will require an agreement between the two parties.
"The market shrugged off the debt ceiling and it got it right," said Sandy Villere, co-portfolio manager of the Villere & Co Balanced and Equity funds. Investors, he said, would do well to remain invested in equities for as long as interest rates remain low. "They've been stints of weakness but we're playing the offensive rather than the defensive."
IBM (IBM)was a leading laggard on the Dow, dropping 6.5% to $174.61 after the tech firm missed expectations - its third quarter revenue falling 4 percent to $23.7 billion.
Goldman Sachs (GS)fell 2.4% to $158.31 as the bank announced a 20 percent drop in revenue. A slump in its fixed-income revenues, which dropped 44%, was the main drag.
On the flipside, the second-largest gold miner Newmont Mining (NEM)rose 4.7% as precious metals gained. Gold surged 3.2% to settle at $1,323.
Google (GOOG) reported 3Q earnings today after the bell. The search giant reported earnings of $10.74 a share on $11.92 billion in revenue excluding traffic acquisition costs. The search giant has missed earnings expectations in two of the past four quarters. Its shares were surging about 6% in after hours trading.
While a much-feared fiscal crisis was averted, the resolution to the nearly three-week long shutdown failed to establish how the two major parties plan to deal with the national debt, leaving investors and tax payers to wonder whether to expect more 11th hour negotiations coupled with a government shutdown again early next year.
Obama said the extension meant government now had the opportunity to focus on a "sensible budget" with a negotiating committee charged with finding a sustainable solution to fiscal issues. Traders say the deadline extension means politics will continue to dictate market sentiment until early next year.
"I am happy that it's over," said Congressman Marc Veasey, a Texas Democrat in a phone interview. "A lot of the (Republican members of Congress) didn't want to go along with it, but the Tea Party took control of their primaries, and they felt they had to go along with the madness."
"They have been really critical of government workers in the past, that's been a big part of everything they talk about," Veasey added. "They're ragging on government workers. Yet I know a lot of government workers in North Texas who are Republicans."
Initial claims for unemployment benefits fell 15,000 to a seasonally adjusted 358,000 last week, according to the Labor Department on Thursday. Economists had expected first-time applications to fall to 335,000 according to a Reuters poll.
The Philadelphia Fed's Business Outlook Survey fell less than expected to 19.8 in October from 22.3, marking a fifth month of gains. This suggests the federal government shutdown had only a modest impact on the manufacturing sector.
The benchmark 10-year Treasury was adding 18/32, diluting the yield to 2.6%. The greenback took a hit, falling to an eight month low against the euro, with the U.S. dollar index off 1.04% to $79.66, it's biggest percentage intraday drop since Sept. 18.
--By Jane Searle and Joe Deaux in New York. With assistance from Ted Reed in Charlotte.