By Kate Gibson, MarketWatch
NEW YORK (MarketWatch) -- U.S. stocks were mostly up on
Wednesday, with the Dow industrials and the S&P 500 near
session highs, as House leaders met on Capitol Hill and the
government shutdown marked a ninth day.
"I think we're getting a glimmer of hope. There seems to be a
conversation going in the background that the way to exit this mess
is a short-term lifting of the debt ceiling and as a reward an
agreement for both sides to sit down and discuss budget issues,"
said Art Hogan, a market strategist at Lazard Capital Markets
LLC.
House leaders from both parties met on Wednesday. In addition,
President Barack Obama set meetings with Republican and Democratic
lawmakers to discuss the budget standoff that has shut down the
government and prompted concerns about the nation's debt
ceiling.
The stock market offered little reaction to the Federal
Reserve's release of minutes from its September meeting, at which
the Fed unexpectedly refrained from tapering its $85 billion in
monthly asset purchases. The minutes showed most Fed members
thinking it would still make sense to scale back bond buying this
year. Janet Yellen, vice chairwoman of the Federal Reserve, will be
nominated to succeed Ben Bernanke as Fed chief, with an
announcement expected this afternoon.
After a 52-point drop, the Dow Jones Industrial Average (DJI)
was lately up 46.75 points, or 0.3%, at 14,822.57.
The S&P 500 index (SPX) rose 2.6 points, or 0.2%, to
1,658.05, with telecommunications the best performing and energy
faring the worst among its 10 major industry sectors.
Darden Restaurants Inc. (DRI) shares jumped 7.4%. The Wall
Street Journal, citing people familiar with the matter, reported
hedge fund Barington Capital LP had taken a 2.8% stake in the owner
of the Olive Garden and Red Lobster restaurants, and was pushing
for Darden to split in two.
Shares of Hewlett-Packard Co. (HPQ) rallied 7% after Chief
Executive Meg Whitman said the company is poised to see "pockets of
growth" in 2014.
Alcoa Inc. (AA) rose 4.5%, a day after the aluminum producer
reported better-than-anticipated quarterly earnings. (Read more on
Alcoa results:
http://blogs.marketwatch.com/thetell/2013/10/08/what-alcoas-results-say-about-global-manufacturing/.)
Shares of Jos. A. Bank Clothiers Inc. (JOSB) and Men's Wearhouse
Inc. (MW) both rallied after Men's Wearhouse spurned the former's
buyout offer.
The Nasdaq Composite (RIXF) declined 9 points, or 0.3%, to
3,685.69.
For every seven stocks falling, roughly eight gained on the New
York Stock Exchange, where 387 million shares traded as of 2:10
p.m. Eastern.
Composite volume approached 2.3 billion shares.
U.S. stocks fell sharply in the last two sessions, with the
S&P 500 ending Tuesday at the lowest level since Sept. 6, hit
by worries about the government shutdown and looming debt-ceiling
deadline.
"I wish I could be watching earnings and economic data, but the
goofiness in Washington is pretty much taking all the air out of
the room," said Paul Nolte, managing director at Dearborn
Partners.
"The market is starting to slowly price in a chance of default;
we don't pay our bills, everybody takes a look at the U.S. a little
differently at that point. That's part of why I think we'll get a
deal, but it's politics not finance," said Nolte, who believes the
stock market could drop as much as 10% should politicians fail to
hike the nation's debt ceiling before an Oct. 17 deadline.
Treasury prices fell, with the yield on the 10-year note
(10_YEAR) used in figuring mortgages and other consumer loans up 3
basis points at 2.663%.
The dollar(DXY) gained against the currencies of major U.S.
trading partners, including the yen (USDJPY) and the euro (EURUSD),
while the price of dollar-denominated commodities declined, with
oil futures off $1.86, or 1.8%, at $101.63 a barrel and gold
futures down $17.40, or 1.3%, to close the floor session at
$1,307.20 an ounce.
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