* JPMorgan posts first loss since 2004, a blow to Dimon
* Markets encouraged by bipartisan talks in Washington
* CBOE Volatility index falls to 15-level
* Indexes up: Dow 0.5 pct; S&P 0.4 pct; Nasdaq 0.6 pct
By Angela Moon
NEW YORK, Oct 11 U.S. stocks extended gains on
Friday, a day after their biggest rally in more than nine months
as investors were hopeful for a solution to end the partial
government shutdown that would stave off a possible U.S.
One motivation for Friday's buyers was the chance an
agreement could come over the weekend. The Senate is expected to
vote over the weekend on extending the federal borrowing limit
through January 2015.
President Barack Obama and congressional Republican leaders
worked to end their fiscal impasse on Friday, but struggled to
strike a deal on the details for a short-term reopening of the
federal government and an increase in the U.S. debt limit.
"People don't want to be short going into a weekend,
especially if a deal does get done," said Dennis Dick,
proprietary trader at Bright Trading LLC in Las Vegas.
The partial shutdown is now in its eleventh day and less
than a week remains before an Oct. 17 deadline to extend the
government's borrowing authority and avoid a debt default.
All S&P sectors were up except consumer staples, which fell
slightly. Energy stocks led the S&P 500, up 1 percent
after the Environmental Protection Agency proposed lowering the
required amount of ethanol to be blended into U.S. gasoline
after Thursday's market close.
The CBOE Volatility index VIX, Wall Street's
so-called fear gauge, fell 4.1 percent to 15.80, the lowest in
nearly two weeks.
"This rally will provide opportunity to modify positioning,
as we expect fundamentals to matter more as the credit cycle
turns," said Peter Cecchini, managing director at Cantor
Fitzgerald in New York, in a note to clients.
The Dow Jones industrial average was up 75.24 points,
or 0.50 percent, at 15,201.31. The Standard & Poor's 500 Index
was up 7.18 points, or 0.42 percent, at 1,699.74. The
Nasdaq Composite Index was up 23.80 points, or 0.63
percent, at 3,784.55.
JP Morgan Chase & Co, the biggest U.S. bank by
assets, reported a rare quarterly loss after incurring $9.2
billion in legal expenses. Its shares seesawed throughout the
trading session, and were down 0.2 percent at $52.39 in late
Wells Fargo & Co, the biggest U.S. mortgage lender,
reported a 13 percent rise in third-quarter profit, but its
mortgage banking income fell sharply as the refinancing boom
began to fade. Wells Fargo was down 0.4 percent to $41.26.
Apparel chain Gap was down 6.6 percent to $36.86 a
day after reporting net sales were flat compared with last year.
The Thomson Reuters/University of Michigan index of consumer
sentiment fell in October to its weakest in nine months and was