After a major drop in the U.S. stock market yesterday, investors seem to be slightly more optimistic as the House of Representatives is slated to vote on a bill proposed by House Speaker John Boehner. Boehner had received considerable opposition even from his fellow Republicans earlier this week but seems to have successfully secured the 217 votes needed to pass the House. However, the Democratic-controlled Senate as well as the White House itself may be too much of a challenge. With the August 2 deadline less than a week away, the U.S. government is under pressure to achieve a deal and raise the $14.3 trillion debt ceiling to avoid a cataclysmic default that could cost the economy an extra $100 billion a year. Another factor helping to boost the market was an improvement in unemployment data. The U.S. Department of Labor said first-time unemployment benefits applications fell 24,000 to 398,000 last week, breaking below the 400,000 mark for the first time since April. In addition, the National Association of Realtors said that contracts for new home purchases also rose for a second month in June. Treasury prices were up as economists are expecting solid demand from foreign investors at the 7-year debt auction. Commodities are experiencing a slight pullback.
Major U.S. Stock Indices
DJIA: 12,336.91 (+0.28 percent)
S&P 500: 1,312.01 (+0.55 percent)
NASDAQ: 2,793.09 (+1.02 percent)
Russell 2000: 806.88 (+0.79 percent)
In other news:
- Is the U.S., and the rest of the Western world, traveling down the same path as Japan in the 1980s? [Economist]
- George Soros isn’t the only one “retiring” from the hedge fund business. The Dodd-Frank Act may be influencing a lot of key fund managers to go the same route. [The Street]
- Somehow, a U.S. credit rating downgrade from the prized AAA level could actually be a good thing for the dollar. [CNBC]
- Tension between the U.S. and China has only increased with the way Congress has dragged out the debt-ceiling process. Could this be the final straw? [Bloomberg]
- Groupon gets all the love from Wall Street, but is rival LivingSocial the real innovator among the two coupon companies? LivingSocial CEO Tim O’Shaughnessy seems to think so. [Fortune]
Check back for more news.