Stocks up on hope for budget deal
David Russell | [email protected]
S&P 500 futures are up some 0.8 percent, while European indexes are surging as much as 2 percent. Asian markets were mixed in the overnight session, though weakness in the Japanese yen triggered a 1 percent rally in Tokyo.
House Republicans are scheduled to meet with President Obama today to discuss reopening the government after a nine-day shutdown. Even more importantly, investors are looking for signs the country's debt ceiling will be raised before the Oct. 17 deadline. Both issues have been hanging over the market for the last week.
The S&P 500 is down 4 percent from its all-time closing high of 1725 last month and yesterday dipped below its 100-day moving average for the third time this year. Sentiment has turned more cautious as high-flying stocks got knocked lower and safe-haven sectors such as utilities and consumer staples outperformed.
Investors have also been turning overseas, piling into Spanish, Italian, Indian, and Taiwanese stocks in particular. The S&P 500 ranks fourth-worst among 22 individual country indexes in the last two weeks, according to our researchLAB market scanner.
Today shifts attention back to the U.S. economy, with initial jobless claims coming out at 8:30 a.m. ET. Retailers will also report monthly same-store sales for September.
Corporate earnings will start to flow heavily next week. Safeway and Micron Technology report this afternoon, followed by JP Morgan and Wells Fargo tomorrow morning.
Commodities and currencies are modestly bullish, with oil up about half a percent and copper posting small gains. The Japanese yen is also lower and the euro is higher, while precious metals are little-changed.
In company-specific news, Ruby Tuesday and Citrix Software are both down more than 10 percent on weak results.