* Dow, S&P 500 rebound after week of losses
* Shutdown boosts fears that debt limit decision will be
* IPO filing shows Twitter had loss in first half of year
* Indexes: Dow up 0.5 pct, S&P up 0.6 pct, Nasdaq up 0.9 pct
By Julia Edwards
NEW YORK, Oct 4 U.S. stocks rose modestly on
Friday, recovering from recent losses driven by the ongoing
budget stalemate in Washington.
The S&P 500 has fallen for nine of the past 12
sessions, but several stock sectors rose on Friday, led by
materials, which were up 1.2 percent, and healthcare up 1
percent. Dow Chemical rose 2 percent.
The first few days of the shutdown have made investors
nervous, but the losses are relatively contained. Investors say
that could change if the shutdown continues, and if the
estimated Oct. 17 deadline to raise the debt ceiling passes.
Investors may start to react poorly if the weekend passes
without an agreement, said Joseph Quinlan, chief market
strategist at U.S. Trust Private Wealth Management.
"I think the market will be in a much nastier mood next week
if we still don't have a deal," Quinlan said.
The CBOE Volatility Index, a measure of investor
anxiety, has been rising lately but was down nearly 5 percent to
16.73 on Friday, still at subdued levels.
Many investors fear the budget impasse will drag on until
Washington lawmakers are faced with having to reach a deal to
raise the debt ceiling and avoid default in less than two weeks.
Republican House Speaker John Boehner and House Majority
Leader Eric Cantor reiterated a call for negotiations on Friday
but did not indicate any change in their positions. House
Republicans have tried unsuccessfully to use the emergency
funding bill to delay the new healthcare law and attach
provisions that would only fund certain government agencies.
Democrats and President Barack Obama want a simple vote on
funding the federal government.
The Dow Jones industrial average was up 69.50 points,
or 0.46 percent, at 15,065.98. The Standard & Poor's 500 Index
was up 10.39 points, or 0.62 percent, at 1,689.05. The
Nasdaq Composite Index was up 32.49 points, or 0.86
percent, at 3,806.83.
The S&P's biggest loser on Friday was struggling retailer
J.C. Penney Co, which fell to a 31-year low earlier in
the session, hitting $7.82 a share. The stock was down 5.8
percent to $7.92 in afternoon trading.
Potbelly Corp said late Thursday its initial public
offering of 7.5 million shares had priced at $14 each. In its
first day of trading, the stock more than doubled to $31.84 with
more than 14 million shares changing hands.
While shutdown concerns have pressured equities over the
past two weeks, the S&P 500 index has frequently found
support at its 50-day moving average of 1,679.61, though it
closed slightly below that level on Thursday.
Government economic reports have been delayed by the
shutdown, and the September payrolls report from the Labor
Department was not released Friday as scheduled.
Twitter Inc gave potential investors their first glance at
its financials on Thursday when it publicly filed documents for
an initial public offering. The information showed that revenue
at the social networking company almost tripled in 2012, though
it posted a loss in the first half of 2013.
Dennis Lockhart, president of the Federal Reserve Bank of
Atlanta, said the shutdown would hurt growth in the last quarter
of this year, while the Bank of Japan said an extended budget
standoff would have a severe global impact.