Tower Technology News on U.S. Stocks Holding Gains Late in the Session
NEW YORK--Stocks edged higher as investors looked past deadlock in Washington and the first U.S. government shutdown in 17 years.
The Dow Jones Industrial Average advanced 36 points, or 0.2%, to 15165, giving up some gains in afternoon trading. The S&P 500 tacked on nine points, or 0.5%, to 1690, and the Nasdaq Composite Index rose 31 points, or 0.8%, to 3802.
Global stocks gained ground despite U.S. lawmakers' failure to reach agreement to keep the government fully funded to start the new fiscal year. Traders said that the markets anticipated the political gridlock, which has contributed to the Dow falling seven of the past eight sessions, including Monday's 129-point slide.
"The market definitely priced in a shutdown, and when you get one, a good portion of the Street is hedged," said Lawrence McDonald, chief U.S. equity, fixed income and political policy strategist at Newedge.
Uncertainty over what the shutdown might mean for the economy, combined with worries about protracted political dysfunction ahead of talks to raise the debt ceiling over the next few weeks, has given investors pause in the stock market, which saw benchmarks at all-time highs less than two weeks ago.
"We're not going to have a smooth run into any deal. There's going to be big up days and down days because of what's at stake," Mr. McDonald said.
Senate Democrats and House Republicans remained at loggerheads over government spending and the launch of the Affordable Care Act. The tension showed few signs of easing Tuesday, with President Barack Obama placing blame for the shutdown on certain House Republicans' "ideological crusade" during remarks in the Rose Garden at the White House.
Other traders said the market moves reflected the view that the turmoil in Washington might be short-lived.
"Most people are pretty sure that this is going to be a short-lived event," said Ian Winer, director of equity trading at Wedbush Securities. "Even though there were big moves leading up to this, most people are positioned for a near-term shutdown, and it looks like the selling has let up. There's not a lot of new buying, but guys have sold what they wanted to sell."
U.S. manufacturing activity in September unexpectedly picked up, according to data released by the Institute for Supply Management. The ISM's manufacturing purchasing managers' index stood at its highest reading so far this year, rising to 56.2 from 55.7 in August.
The Commerce Department didn't release Tuesday morning's scheduled report on construction spending, the first economic data to be affected by the government's partial shutdown.
All 10 of the S&P 500's sector groups advanced, led by health-care and technology stocks. Apple rose after billionaire investor Carl Icahn tweeted Tuesday morning about his dinner with Apple's chief executive, Tim Cook, at which Mr. Icahn said he "pushed hard" for the tech giant to buy back stock.
Merck was the biggest gainer on the Dow after the pharmaceutical company unveiled cost-cutting measures that include roughly 8,500 additional layoffs. The company aims to save about $2.5 billion a year by the end of 2015.