* Major indexes rebound but Dow, S&P still end down for the
* 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 0.7 pct, Nasdaq up 0.9 pct
By Angela Moon
NEW YORK, Oct 4 U.S. stocks rebounded on Friday,
but major stock indexes ended the week lower as a federal
government shutdown continued for a fourth day, with no sign of
an end to a budget stalemate in Washington.
The Nasdaq composite index ended the week higher as Friday's
advance accelerated in the afternoon, but gains by the Dow and
the S&P 500 were not enough to cancel the week's losses.
Political wrangling continued as House Speaker John Boehner
and House Majority Leader Eric Cantor reiterated Republicans'
call for negotiations by Democrats, but they did not indicate
any change in their positions.
The government shutdown has made investors nervous as it
drags on, but the impact from it has been relatively limited.
A more serious concern, investors say, is if the shutdown
continues and the budget battle becomes tied up with the federal
debt limit, which a divided Congress must raise by Oct. 17 to
avoid an unprecedented U.S. debt default.
"I think the market will be in a much nastier mood next week
if we still don't have a deal," said Joseph Quinlan, chief
market strategist at U.S. Trust Private Wealth Management.
Reflecting a rise in investor anxiety, some options
investors were starting to pay more for protection against
The CBOE Volatility Index VIX, a 30-day forecast of
stock market volatility measured using a strip of near-term S&P
500 options, rose to 16.73 on Friday from 13.12 on Sept. 20, a
sign of increased worry, although this level is still considered
Heavy buying activity on Thursday was seen in October and
November VIX out-of-the money call options - contracts that are
far from the current level - with heavy open interest additions
in November contracts.
"This suggests traders are feeling the need to be protected
through mid-November and implies that the market expects
negotiations in Washington over the government shutdown and debt
ceiling will be long and drawn out," said Matt Franz, investment
adviser representative at Stutland Volatility Group.
The Dow Jones industrial average was up 76.10 points,
or 0.51 percent, at 15,072.58. The Standard & Poor's 500 Index
rose 11.84 points, or 0.71 percent, at 1,690.50. The
Nasdaq Composite Index was up 33.41 points, or 0.89
percent, at 3,807.75.
For the week, the Dow fell 1.2 percent, the S&P 500 lost 0.1
percent while the Nasdaq added 0.7 percent. The S&P 500
has fallen for nine of the past 12 sessions.
The S&P's biggest loser on Friday was struggling retailer
J.C. Penney Co fell to its lowest in more than 30 years,
ending down 6.5 percent at $7.86.
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. The stock
closed up 119.8 percent at $30.77.
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 filed for an initial public
offering. The information showed that revenue at the social
networking company almost tripled in 2012, but 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.
Trading volume totaled about 5.2 billion shares on the New
York Stock Exchange, the Nasdaq and the NYSE MKT, below the
average daily closing volume of about 6.1 billion this year.
Advancing stocks outnumbered declining stocks by 1,967 to
995. On the Nasdaq, advancing stocks beat decliners by 1,741 to