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Markets rise even as shutdown starts

Oct. 02, 2013 @ 07:00 AM

NEW YORK — Investors stayed calm on the first day of a partial shutdown of the U.S. government Tuesday and sent the stock market modestly h ig her.

A long-running dispute in Washington over President Barack Obama’s health care law caused a deadlock over the U.S. budget, forcing about 800,000 federal workers off the job and suspending all but essential services. With the Republi­can-controlled House of Rep­resentatives and Democratic­controlled Senate locked in a stalemate, it was unclear how long a temporary bill needed to
finance government activities would be stalled.

Despite the political rancor, investors didn’t push the panic button. That suggests that, at least for now, they aren’t antici­pating that the stalemate will cause enough disruption in the economy to threaten a gradual U.S. recovery and a four-year bull run in the stock market.

“The trend of the economy appears to be in a positive direc­tion,” said Michael Sheldon, chief market strategist at RDM Financial Group. “Unless this really gets ugly, we think the markets should start to look ahead to what we believe should be better economic data over
the next six to 12 months.” In the latest encouraging news on the economy, a private industry group reported Tues­day that U.S. manufacturing expanded at the fastest pace since April 2011 last month on stronger production and hir­ing .

The Dow Jones industrial average rose 62.03 points, or 0.4 percent, to 15,191.70. The Stan­dard & Poor’s 500 index gained 13.45 points, or 0.8 percent, to 1,695.00. The Nasdaq composite rose 46.50 points, or 1.2 percent, to 3,817.98.

All ten sectors of the S&P 500 rose, led by gains in health care and technology.

 

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