Wall Street Snubs Government Shutdown as Stocks Soar
Stocks held the line on Tuesday as investors showed resilience in the face of the federal government shutdown that had officially begun at midnight.
The S&P 500 Index rallied 0.80 percent to finish the day at a clean 1,695 points, while the Dow Jones Industrial Average rose 0.41 percent, ending with at a total of 15,191.70 points, and the NASDAQ added1.23 percent to 3,817.98 points.
The shutdown resulting from Congress’s inability to pass a resolution that would continue to fund the government pertains mainly to “non-essential” government employees, and its effects can already be seen in the Department of Commerce’s decision to delay the release of construction-spending data that had been scheduled for the morning.
The “business as usual” reaction of markets to the current scenario could be interpreted as a snub to the intransigence and brinkmanship of elected officials, particularly those in the House of Representatives. While the shutdown will certainly not be without onerous consequences, investors seem to have indicated that they do not believe that it can last long enough to significantly dampen the bullish environment for equities that has been the dominant theme of 2013.
On the S&P 500, the main beneficiaries of the day’s trading activity were streaming content provider Netflix (NFLX) , and Walgreen Co. (WAG) , the latter getting a bump from an impressive fiscal fourth-quarter earnings report. Both stocks were up over 4 percent by the closing bell.
The Dow was led up by healthcare companies, with Merck & Co. (MRK) and Unitedhealth Group Inc. (UNH) making the biggest gains on the day.
On the NASDAQ, services and tech shares were the stories of the day, with Apple Inc. (AAPL) up some 2 percent, followed by Yahoo! Inc. (YHOO) , Groupon (GRPN) , and semiconductor manufacturer Himax Technologies (HIMX) all making gains on heavy trading. LED producer Cree Inc. (CREE) jumped over 15 percent by the closing bell.
Meanwhile, the services sector was held up mainly by shipping stocks, including big gains for NewLead Holdings Ltd. ($NEWL), DryShips Inc. (DRYS) , and FreeSeas Inc. (FREE) .
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