Relief rally sweeps Dow back above 15,000

Finally there are signs of progress in Washington and buyers have come flooding back to the stock market in response.

Share prices have spiked up on Wall Street today after House Speaker John Boehner said that Republicans in the House of Representatives would offer legislation for a temporary increase in the debt ceiling in return for talks with President Obama regarding the budget.

This marks a departure from the Republicans’ previous standpoint which called for spending cuts to be incorporated into any legislation for raising the debt ceiling.

By early afternoon in New York, the Dow had climbed more than 231 points, or 1.56% to 15,034. The S&P 500 rose a similar percentage, while the NASDAQ 100 jumped 1.9%.

The markets have been on such a sustained slide that any good news out of Washington was always likely to result in a strong bounce from such an oversold state. The dollar has strengthened against the yen on the news, rising 0.81% to 98 yen to the dollar, but the reaction of EUR/USD and GBP/USD was more muted. Crude oil has rebounded from yesterday’s sell-off, jumping 1.75% on hopes that a resolution to the political stalemate would support demand.

Jobless claims data earlier showed a big increase last week. The number of claimants for first time unemployment insurance rose 66,000 to 374,000. A large portion of this can be attributed to the backlog in California dating back to its computer upgrade issue in September.

The fact that several weeks later we are still seeing repercussions from that glitch casts all of September’s data under a questionable light and it’s hard to see how the Fed will be able to make a case for tapering stimulus at their meeting later this month amidst such a paucity of economic data when the one federal report being issued throughout the shutdown is clouded by unusual issues.

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

Find articles by analysts

Een artikel zoeken

Form has failed to submit. Please contact IG directly.

  • Ik wens per e-mail informatie van IG Group bedrijven te ontvangen over handelsideeën en IG's producten en diensten.

Voor meer informatie over hoe wij uw gegevens mogelijk kunnen gebruiken, bekijkt u ons Privacy- en toegangsbeleid en onze privacy website.

CFD’s zijn complexe instrumenten en brengen vanwege het hefboomeffect een hoog risico mee van snel oplopende verliezen. 79% van de retailbeleggers lijdt verlies op de handel in CFD’s met deze aanbieder.
Het is belangrijk dat u goed begrijpt hoe CFD's werken en dat u nagaat of u zich het hoge risico op verlies kunt permitteren.
CFD’s zijn complexe instrumenten en brengen vanwege het hefboomeffect een hoog risico mee van snel oplopende verliezen.