Stocks Close Firmly Positive Despite Ongoing Shutdown - U.S. Commentary

(RTTNews) - After coming under pressure over the course of the previous session, stocks regained some ground during trading on Friday. The strength on Wall Street came even as the ongoing government shutdown entered its fourth day.

The major averages were largely rangebound in afternoon trading, holding on to notable gains. The Dow rose 76.10 points or 0.5 percent to 15,072.58, the Nasdaq climbed 33.41 points or 0.9 percent to 3,807.75 and the S&P 500 advanced 11.84 points or 0.7 percent to 1,690.50.

For the week, the major averages turned in another mixed performance. While the Nasdaq rose by 0.7 percent, the Dow tumbled by 1.2 percent and the S&P 500 edged down by 0.1 percent.

Bargain hunting contributed to some of the strength on Wall Street, with traders picking up stocks at reduced levels following the weakness seen on Thursday.

The pullback seen in the previous session extended recent downward trends by the Dow and the S&P 500, which hit their worst levels in almost a month.

Traders also seemed to be expressing some optimism about a resolution of the government shutdown even though lawmakers currently remain at an impasse over a temporary spending bill.

In public remarks, Democrats and Republicans continue to try to pin blame for the shutdown on the other side, but recent reports suggest that moderate Republicans are urging House Speaker John Boehner to bring a "clean" spending bill to the floor.

Boehner has also pledged to avoid a government default, suggesting that there may be progress toward a solution before the October 17th deadline to raise the debt ceiling.

Notably, the government shutdown led the Labor Department to postpone the release of its closely watched monthly employment report.

The report on the employment situation in the month of September had previously been due to be released this morning. The Labor Department said an alternative release date has not been scheduled.

Sector News

Networking stocks showed a substantial move to the upside over the course of the trading day, driving the NYSE Arca Networking Index up by 2.3 percent. With the gain, the index reached its best closing level in over two years.

Ciena (CIEN) helped to lead the networking sector higher, jumping by 6.1 percent, while Infinera (INFN) and Juniper Networks (JNPR) also posted strong gains.

Significant strength was also visible among health insurance stocks, as reflected by the 1.5 percent gain posted by the Morgan Stanley Healthcare Payor Index. Aetna (AET) and Humana (HUM) turned in two of the sector's best performances.

Chemical, internet, and oil service stocks also saw considerable strength, moving to the upside along with most of the other major sectors.

Meanwhile, housing stocks came under pressure on the day, dragging the Philadelphia Housing Sector Index down by 1.3 percent.

Other Markets

In overseas trading, stock market across the Asia-Pacific region moved mostly lower during trading on Friday. Japan's Nikkei 225 Index slumped by 0.9 percent, while Hong Kong's Hang Seng Index ended the day down by 0.3 percent.

Meanwhile, the major European markets moved to the upside on the day. While the French CAC 40 Index advanced by 0.9 percent, the German DAX Index rose by 0.3 percent and the U.K.'s FTSE 100 Index inched up by 0.1 percent.

In the bond market, treasuries moved back to the downside after turning higher over the course of the previous session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 4.6 basis points to 2.652 percent.

Looking Ahead

Next week's trading is likely to be driven by any significant developments in Washington, as an ongoing shutdown would likely postpone much of the economic data scheduled to be released.

At the same time, earnings season will also get underway next week, with Alcoa (AA), Yum! Brands (YUM), Safeway (SWY), JP Morgan (JPM) and Wells Fargo (WFC) among the companies due to release their quarterly results.