Market rises despite threat of shutdown
Investors shrugged off the potential for a federal government shutdown Friday, driving U.S. stocks higher and setting new milestones for several of the indexes.
The Standard & Poor’s 500 index, Nasdaq composite and Russell 2000 index of smaller-company stocks finished at record highs as the market bounced back from modest losses a day earlier. The S&P 500 has now posted a weekly gain in nine of the last 10 weeks.
Retailers, banks and consumer goods companies accounted for much of the latest gains. Energy stocks fell along with crude oil prices. Utilities also declined as bond yields edged up to their highest level in more than three years.
The market rally suggested that the possibility of a federal government shutdown this weekend wasn’t worrying traders.
“Looking back to some of the previous shutdowns, they weren’t terribly extended in nature and didn’t cause a lot of disruption by the time everything was done,” said Tim Dreiling, regional investment director at U.S. Bank Private Wealth Management. “I don’t think it’s going to disrupt growth or make much of an impact on GDP, for example.”
Investors have driven stock indexes higher on optimism over the global economic outlook and corporate earnings, and the possibility of a federal government shutdown did not dim that enthusiasm Friday.
Investors bid up shares in clothing makers, restaurant chains, department stores and other consumer-focused companies.
Lowe’s rose 3.5 percent after the home-improvement supply retailer named three new directors. The stock added $3.59 to $104.95.
Some big companies missed out on the broader market gains Friday.
IBM slumped 4 percent despite a solid fourth-quarter report. The technology and consulting company was the biggest decliner in the Dow. The stock slid $6.75 to $162.37.
American Express fell 1.8 percent after the credit card issuer suspended its share buy-back program for six months following a big one-time tax charge. The stock shed $1.83 to $98.03.
Oil futures closed lower after the International Energy Agency said U.S. oil production would rise sharply this year.