US investors have powered the S&P 500 to an all-time high, one day after Washington politicians reached a deal to reopen the government and avert a feared debt default.
The S&P 500, the broadest of the major measures of US markets, closed at 1,733.15 on Thursday, up 0.67 per cent for the day and more than seven points above the previous record closing high of 1,725.52, reached on September 18.
The surge came despite a handful of disappointing quarterly earnings results by blue chips that delivered a loss to the narrower 30-stock Dow Jones Industrial Average.
The S&P 500 gained 11.60 points for the day, also scoring an intraday high of 1,733.45.
The Dow was down 2.18 points (0.01 per cent) at 15,371.65, while the Nasdaq Composite jumped to 23.72 points (0.62 per cent) to 3,863.15, its highest level since September 2000.
“The mood is serene and positive, the unthinkable was avoided,” said Peter Cardillo of Rockwell Global Capital, referring to the 11th hour deal lifting the Treasury’s debt ceiling in Congress.
Stocks opened lower in a short-lived bout of profit taking that came on the heels of the markets’ nearly 1.4 per cent gain Wednesday.
That came in reaction to the news that Washington politicians had broken the deadlock that had shut down the government for over two weeks and threatened to leave the Treasury unable to pay its bills.
They soon reversed course and slowly marched up past the previous S&P 500 high – while leaving the 30-stock Dow behind.
Dow component American Express jumped 5.1 per cent after it reported a strong third quarter, with net income of $US1.4 billion up 9 per cent, ahead of forecasts.
But that was not enough to counter the damage from IBM and Goldman Sachs.
IBM shares sank 6.4 per cent after it reported a 4 per cent fall in revenues and missed again Wall Street forecasts for the company.
Goldman fell 2.4 per cent after posting a 2 per cent fall in profit for the third quarter, with revenues diving 20 per cent.
EBay sank 4 per cent as it cut its fourth-quarter estimate after just matching Wall Street expectations for the third quarter.
After the market closed, meanwhile, Google reported its quarter, showing a 36 per cent jump in net profit to $US2.97 billion, or $US8.75 a share.
Google shares jumped nearly 7 per cent in after-hours trade to more than $US95, well past the record high of $US928.
Bond prices surged for a second day on the news of a Washington deal. The 10-year Treasury yield fell to 2.59 per cent from 2.67 per cent late Wednesday, while the 30-year fell to 3.66 per cent from 3.72 per cent.
Bond prices and yields move inversely.
