- POSTED: 12 Oct 2013 04:59
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US stocks rallied for a second straight session on Friday on rising optimism about a Washington deal to avert a debt default.
NEW YORK CITY: US stocks rallied for a second straight session on Friday on rising optimism about a Washington deal to avert a debt default.
The Dow Jones Industrial Average jumped 111.04 (0.73 per cent) to 15,237.11.
The broad-based S&P 500 rose 10.64 (0.63 per cent) to 1,703.20, while the tech-rich Nasdaq Composite Index tacked on 31.13 (0.83 per cent) to reach 3,791.87.
Investor anxiety eased on Thursday after Republican leaders offered President Barack Obama a short term extension of the US government's borrowing authority so as to stave off a possible debt default.
By Friday, there was still no deal, but markets appeared encouraged by continued talks.
"Yesterday was like the best day of the year and today is a good, strong follow-on," said Greg Peterson, director of investment research at Ballentine Partners.
"Everybody's pricing in that we'll have some kind of agreement," said Anthony Conroy, a trader at BNY ConvergEx Group.
Earnings season began picking up in earnest with reports from Dow component JPMorgan Chase and Wells Fargo. A score of additional reports will follow in the next few weeks.
JPMorgan finished unchanged after reporting its first quarterly loss since 2004 due to large legal charges. However, the bank's underlying performance was solid and it beat expectations when special items were excluded.
Wells Fargo, another banking giant, also finished flat after earnings rose 13 per cent compared with the year-ago period. On the downside, the company's key mortgage business suffered declines compared with the prior quarter in the wake of higher interest rates.
Retailer The Gap fell 6.7 per cent after September sales showed Gap Global comparable store sales sank 3 per cent versus last year. The company's Banana Republic and Old Navy chains also reported lower sales.
The results suggest the retail sector's "overall weakness has caught up" with The Gap, which had previously outperformed its peers.
Semiconductor company Micron fell 8.6 per cent after reporting a gain of $1.7 billion compared with a loss of $243 million a year ago.
However, the results were lifted by a recent acquisition of Elpida Memory, Inc. Without those gains, profits would have missed expectations by four cents a share.
Bond prices were unchanged. The yield on the 10-year US Treasury held steady at 2.68 per cent, the same level as Thursday, while the 30-year was also unchanged at 3.74 per cent. Prices and yields move inversely.