Signs of Progress

By Alex Eule | Wednesday, October 6

Worries Subside...a Little. Stocks rose for a second consecutive day but it took a substantial rebound to get there. The Dow Jones Industrial Average was down 460 points at 10 a.m. this morning, but finished the day up 102 points, or 0.3%. It was the Dow's biggest turnaround since December. 

The S&P 500 and Nasdaq Composite were also down sharply shortly after the open but closed up 0.4% and 0.5%, respectively. 

The comeback can be tied to easing of anxieties on multiple fronts, including signs of progress in Washington's debt ceiling fight. Senate Minority Leader Mitch McConnell said Republicans would allow Democrats to move forward with a short-term extension of the debt ceiling. There was no official agreement from Democrats, but stocks crossed into positive territory shortly after McConnell's comments.

A short-term deal would ease worries about an unprecedented U.S. debt default. Without action on the debt ceiling, Treasury Secretary Janet Yellen has said the country will run out of measures to avoid a default by Oct. 18. 

Meanwhile, the 10-Year Treasury yield posted a rare recent decline, slipping 0.004 percentage point to 1.524%. The yield had been up 12 of the previous 15 trading days.

The 10-year yield had been up earlier in the day after an ADP jobs report showed the U.S. economy added 568,000 jobs last month, well above economists' forecast of 450,000. Faster job growth often stokes fear of inflation, but investors seemed to ultimately take some comfort in ADP's downward revisions for July and August job numbers. The official read on jobs comes Friday, when the U.S. Labor Department releases its September payrolls report. Economists currently expect nonfarm payroll growth of 488,000, up from 235,000 in August. The unemployment rate is seen ticking down to 5.1% from 5.2%.

Finally, a rally in energy prices took a breather today, calming inflationary concerns. 

Natural gas prices were down 10% on the day, while the price of crude oil fell 1.9%, to $77.43 a barrel.

DJIA: +0.30% to 34,416.99
S&P 500: +0.41% to 4,363.55
Nasdaq: +0.47% to 14,501.91

The Hot Stock: Enphase Energy +4.2%
The Biggest Loser: Moderna -8.9%

Best Sector: Utilities +1.6%
Worst Sectors: Energy -1.1%