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Stocks Rise After Deal to End Government Shutdown
USAgNet - 01/23/2018

After wavering around break even in morning trading on Monday, stocks started rising steadily higher after Senate Democrats said they'll support a bill that would fund the federal government for three weeks. All three major U.S. stock indexes ended the day posting new record highs.

According to CBS News, the political deal to reopen the government came after Republican leaders promised Democrats they'll soon address immigration and other contentious political issues. The government shut down after the previous funding bill expired Friday.

The Standard & Poor's 500 index jumped 23 points, or 0.8 percent, to close at 2,833, after closing at another all-time high on Friday. The Dow Jones industrial average galloped 143 points higher, or 0.6 percent, to end at 26,215. The Nasdaq composite added 72 points, or 1 percent, finishing at 7,408. The Russell 2000 index of smaller-company stocks gained 6 points, or 0.8 percent, to close at 1,605.

"Progress toward ending the U.S. government shutdown gave a modest boost to risk sentiment, leaving equities higher on the day," TD Securities analysts said in a note.

The threat of a shutdown has loomed for months and still isn't completely resolved, but it hasn't troubled Wall Street too much because investors doubt it would have much effect on the market or the economy unless it persists for a long time. Smaller companies, which could be hurt the most by a reduction in consumer spending or confidence, switched from small losses to solid gains.

In a research briefing, economist Gregory Daco of Oxford Economics said the chances of repeat performance of the government shutting down are 35 percent when this deal expires on Feb. 9. Even worse, though, Daco noted that the looming debt ceiling battle in March could "disrupt markets and confidence more significantly."

Energy and technology companies advanced Monday as U.S. stocks continue their bull run. High-dividend stocks were also up as bond yields held steady. Yields had climbed to their highest level in more than three years last week.


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