Disaster Deferred for Another Day
U.S. markets rallied sharply on Wednesday as politicians in Congress apparently settled their differences by agreeing to disagree and punt the U.S. debt ceiling debate into 2014. So, once again, disaster was deferred for another day and markets rallied back to close just below all time highs even though no problems were solved nor long-term decisions made.
Investors who bought stocks during Tuesday’s slump, out of faith that the debt ceiling standoff would be resolved before the October 17 deadline, had a big payday on Wednesday – assuming they sold those shares. Those who followed the maxim, “Buy the rumor and sell the news” enjoyed some nice profits.
The Dow Jones Industrial Average (NYSEARCA:DIA) picked up 205 points to finish Wednesday’s trading session at 15,373 for a 1.36 percent advance. The S&P 500 (NYSEARCA:SPY) jumped 1.38 percent to close at 1,721. The Nasdaq 100 (NASDAQ:QQQ) surged 1.14 percent to finish at 3,281. The Russell 2000 (NYSEARCA:IWM) soared 1.19 percent to end the day at 1,092.
On London’s ICE Futures Europe Exchange, December futures for Brent crude oil advanced $1.15 (1.05 percent) to $110.57/bbl. (NYSEARCA:BNO). December gold futures rose $8.70 (0.68 percent) to $1,281.90 per ounce (NYSEARCA:GLD). Transports had the pedal to the metal as they escaped from Washington on Wednesday, with the Dow Jones Transportation Average (NYSEARCA:IYT) accelerating 1.36 percent.