Business

Wall Street surges as debt-ceiling truce provides relief

3 minute read

A specialist trader works inside a booth on the floor of the New York Stock Exchange in New York City, U.S., October 6, 2021. REUTERS/Brendan McDermid

Register now for FREE unlimited access to reuters.com
  • U.S. Senate rushes to advance $480 bln debt-limit increase
  • U.S. weekly jobless claims fall sharply
  • All 11 S&P 500 sectors advance
  • Levi Strauss shares soar after profit beat
  • Indexes jump: Dow 1.45%, S&P 1.38%, Nasdaq 1.66%

Oct 7 (Reuters) - Wall Street's main indexes jumped on Thursday in a broad-based rally led by heavyweight technology shares, after a truce in the debt-ceiling standoff in the U.S. Congress relieved concerns of a possible government debt default this month.

The U.S. Senate took a step toward passing a $480 billion increase in Treasury Department borrowing authority, which would put off another partisan showdown until December. read more

Uncertainty over the debt-ceiling negotiations was one concern investors cited in September as the S&P 500 logged its biggest monthly percentage drop since the onset of the coronavirus pandemic in March 2020.

Register now for FREE unlimited access to reuters.com

"Today's (market) is driven by a slight move in Washington towards rationality about being able to pay their bills, write some checks," said Kim Forrest, chief investment officer at Bokeh Capital Partners in Pittsburgh.

Meanwhile, data showed the number of Americans filing new claims for jobless benefits dropped last week by the most in three months, suggesting the labor market recovery was regaining momentum as the latest wave of COVID-19 infections began to subside. read more

The closely watched monthly U.S. jobs report is due on Friday.

“Today’s numbers reinforce the expectation that employment will take a significant step up in the coming months, and I think that’s positive for the economy,” said Brad Neuman, director of market strategy at Alger.

"The market climbed its wall of worry today as fears of a debt-ceiling impasse receded and hopes for an acceleration in employment gains were reinforced.”

The Dow Jones Industrial Average (.DJI) rose 499.26 points, or 1.45%, to 34,916.25, the S&P 500 (.SPX) gained 60.1 points, or 1.38%, to 4,423.65 and the Nasdaq Composite (.IXIC) added 241.05 points, or 1.66%, to 14,742.96.

All 11 S&P 500 sectors were higher. Materials (.SPLRCM) led the way, climbing 2.1%, while consumer discretionary (.SPLRCD) and healthcare (.SPXHC) also were among the top performers.

Mega-cap stocks, including Apple Inc (AAPL.O), Amazon.com Inc (AMZN.O) and Microsoft Corp (MSFT.O), were the biggest boosts to the S&P 500. Early this week, heavyweight high-growth stocks fell sharply as Treasury yields rose.

Investors will soon turn their attention to third-quarter earnings reports that start to arrive in earnest next week.

Levi Strauss & Co (LEVI.N) shares jumped over 8% after the jeans maker beat third-quarter revenue and profit estimates. read more

Advancing issues outnumbered declining ones on the NYSE by a 3.98-to-1 ratio; on Nasdaq, a 3.52-to-1 ratio favored advancers.

The S&P 500 posted 30 new 52-week highs and 3 new lows; the Nasdaq Composite recorded 81 new highs and 59 new lows.

Register now for FREE unlimited access to reuters.com
Reporting by Lewis Krauskopf in New York, Shreyashi Sanyal and Devik Jain in Bengaluru; Editing by Saumyadeb Chakrabarty, Maju Samuel and David Gregorio

Our Standards: The Thomson Reuters Trust Principles.

More from Reuters