US Stocks Extend Rally as Lawmakers Reach Compromise to Reopen Government

Marco Green
January 23, 2018

With the government set to reopen, investor enthusiasm again rose to the fore at the start of a week full of major corporate earnings reports.

Investors had largely shrugged off the shutdown, which began after the Senate rejected a one-month spending bill late Friday night and appeared to be drawing to a close around the end of the US trading day. Investors had shrugged off the threat last week, saying they were not anxious about a major pullback in shares if US lawmakers failed to strike a deal.

Wall Street, which has been resilient to the threat of a shutdown, rose on Friday, with the S&P 500 and Nasdaq notching record closing highs.

US stocks jumped to fresh highs Monday after Senate leaders said they reached a deal to end the federal government shutdown.

The broader S&P 500 jumped 0.8 per cent to land at 2,832.97, while the tech-heavy Nasdaq sailed almost a full percentage point higher to settle at 7,408.03.

The shutdown is largely due to a disagreement over whether to include protections for young illegal immigrants brought to the country as children in the spending bill. The so-called "investor fear index" closed down 2.1% at 11.03, on a scale of 1-100 where 20 represents the historic man. Vol has been trending higher as of late, but the underlying trend continues to a show a complacent market.

Democrats have demanded the inclusion of protections for the illegal immigrants known as Dreamers, while Republicans have argued the issue should be addressed separately.

Schumer has expressed support for a bill funding the government for just a few days in order to keep both sides at the negotiating table.

The report said the consumer sentiment index dipped to 94.4 in January from the final December reading of 95.9.

Philip Morris (PM), Universal (UVV) and British American Tobacco (BTI) turned in some of the tobacco sector's best performances on the day.

World markets were unfazed by the shutdown earlier in the day.

Other reports by Click Lancashire

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