Stocks Jump on Hopes for Fiscal Talks

http://www.nytimes.com/2013/10/11/business/daily-stock-market-activity.html

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Stocks on Wall Street closed strongly higher on Thursday as investors perceived signs of progress in fiscal negotiations in Washington.

By the end of trading, the Standard & Poor’s 500-stock index jumped 2.2 percent, the Dow Jones industrial average gained 2.2 percent, or more than 323 points, and the Nasdaq composite index added 2.3 percent.

President Obama and Congressional leaders were set to meet later in the day for discussions. The United States government shutdown has gone on for 10 days, since Congressional Republicans refused to pass a budget for the fiscal year without modifications to the president’s health care reform law.

House Republicans were considering a short-term increase in the government’s borrowing authority, in a plan from Representative Paul D. Ryan. That would keep a possible default after Oct. 17 at bay and buy time for negotiations on broader policy measures.

“It would be a minor sign of hope there may be some more positive news coming in the next couple of days, hard to make much more out of that,” said Fred Dickson, chief market strategist, D.A. Davidson & Company in Lake Oswego, Ore. “The markets right now are betting somebody will blink between now and Oct. 17.”

Treasury Secretary Jacob J. Lew said on Thursday that the gridlock in Washington was hurting the economy, and he urged Congress to raise a cap on government borrowing to keep America from defaulting on its debt.

Initial claims for state unemployment benefits increased 66,000, to a seasonally adjusted 374,000, the highest level since the end of March and well above expectations for 310,000 claims, though technical problems in California from the upgrading of its computers accounted for about half the increase in claims.

Chevron, the second-largest oil company in the United States, warned on Wednesday that its third-quarter earnings would be lower than in the second quarter as fuel margins were squeezed. Its shares rose 0.2 percent.

Citrix Systems slumped 11.9 percent after the cloud computing software maker estimated quarterly results to be below analysts’ expectations as businesses delayed contracts.