US: Wall Street rises as debt ceiling, inflation worries cool

[BENGALURU] US stocks rose on Thursday after a temporary truce in the debt-ceiling stand-off in Congress relieved concerns of a possible government debt default, while a dip in oil prices eased worries of higher inflation.

Top US Senate Republican Mitch McConnell on Wednesday floated a plan to support an extension of the federal debt ceiling into December, potentially heading off a historic default. Congressional Democrats and Republicans were expected to continue negotiating on Thursday.

"I didn't think there is actually going to be a default, it is a low probability, high severity possibility. And since that's been removed from the market, I'm not surprised to see this bounce in futures," said Greg Swenson, founding partner of Brigg Macadam.

Mega-cap stocks were back in action - Apple, Amazon.com, Microsoft and Alphabet rose between 1.0 per cent and 1.5 per cent amid a dip in the benchmark US 10-year Treasury yield on Thursday.

All the 11 major S&P 500 sectors rose in the first half hour of trading, with financials, technology, materials, industrials, healthcare and consumer discretionary gaining more than 1 per cent.

Wall Street's main indexes are now set for weekly gains, recovering from bouts of selling pressure in high-growth stocks earlier in the week when Treasury yields soared.

"I'm not worried about the markets in the near term, and buying dips is advisable," Mr Swenson said.

European and Asian stocks rose earlier in the day after cooling oil and gas prices offered relief to investors worried about runaway inflation. The S&P 500 energy sector index lagged its peers to only rise 0.6 per cent.

Data showed 326,000 Americans filed new claims for jobless benefits last week, below a forecast by economists polled by Reuters of 348,000 applications. It also showed layoffs increased from a 24-year low in September.

This comes after a survey from the ADP National Employment Report showed a strong increase in private payrolls in September and ahead of the more comprehensive non-farm payrolls data due on Friday. It is expected to cement the case for the Federal Reserve's slowing of asset purchases.

At 9. 46 am ET, the Dow Jones Industrial Average was up 376.57 points, or 1.09 per cent, at 34,793.56; the S&P 500 was up 46.77 points, or 1.07 per cent, at 4,410.32; and the Nasdaq Composite was up 172.48 points, or 1.19 per cent, at 14,674.39.

Advancing issues outnumbered decliners by a 4.52-to-1 ratio on the NYSE, and by a 4.04-to-1 ratio on the Nasdaq.

The S&P index recorded 23 new 52-week highs and three new lows, while the Nasdaq recorded 42 new highs and 33 new lows.

REUTERS