NEW YORK – Wall Street stocks finished modestly higher yesterday after trading in the red most of the session, as congressional Republicans offer a compromise in high-stakes talks on lifting the United States debt limit.
Senate minority leader Mitch McConnell said Republicans will allow Democrats to vote on temporarily lifting the ceiling on how much the government can borrow.
The stalemate in the talks had raised the possibility of a US default in less than two weeks.
McConnell’s offer punts the problem to December, giving the ruling Democrats time to prepare a longer-term solution.
“For now, at least, this disaster du jour just got moved to the back-burner,” said Art Hogan, chief strategist at National Securities.
The Dow Jones Industrial Average ended up 0.3% at 34,416.99, more than 550 points above its session low.
The broad-based S&P 500 gained 0.4% to 4,363.54, while the tech-rich Nasdaq Composite Index advanced 0.5% to 14,501.91.
Hogan said the market may be in line for more volatility in the weeks ahead, with the Federal Reserve expected to taper stimulus payments soon and investors anxious about the upcoming earnings season.
Sam Stovall, chief investment officer at CFRA Research, said “stagflation” has returned as a leading worry for investors, given rising consumer prices.
But, he pointed to forecasts showing inflation retreating a year from now, saying in a note that “comparisons with the 1970s are out of line”. – AFP, October 7, 2021
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