U.S. stocks bounce back from selling

Boehner: House unlikely to pass stopgap spending bill expected from the Senate
NEW YORK (MarketWatch) — U.S. stocks rose on Thursday, with the S&P 500 rebounding after its longest decline this year, as a larger-than-expected drop in jobless claims mostly overrode worries about a budget standoff on Capitol Hill.

Equities came off session highs after House Speaker John Boehner said on Thursday that his party will push for a bill that will tie increasing the debt ceiling — and continue funding the government past Oct. 1 — to more cuts in federal spending.

The comments by the Ohio Republican did not completely derail market gains as the S&P 500 rebounded from its longest stretch of losses since late December. Stocks got a second wind after Senate Majority Leader Harry Reid, D-Nev., said his chamber plans to have a stopgap budget bill finished by Sunday.

Stocks are not far from all time-highs “while being held hostage to the dysfunction in Washington,” said Art Hogan, market strategist at Lazard Capital Markets.

After a five-session losing streak, the Dow Jones Industrial Average (DJI JIA) rallied as much as 113.9 points, and lately held a gain of 53.49 points, or 0.4%, to 15,326.75. The index’s lead had been reduced to as little as 11 points.

Also up after a five-session drop, the S&P 500 index (SNC:SPX) climbed 5.74 points, or 0.3%, to 1,698.51, with telecommunications pacing gains that included all but utilities among its 10 major industry sectors.

A strong opening came in response to near-term oversold conditions, Hogan said. “Although it hasn’t been deep, the sellout was long,” he said.

“I think the debt ceiling [will be] raised; I don’t think we’re going to see a default,” said Chris Gaffney, senior vice president and senior market strategist at EverBank Wealth Management.

The Senate on Wednesday moved toward advancing a bill that would keep the government open after Monday without wiping out funding from the health-care law. Also Wednesday, Treasury Secretary Jacob Lew told Congress the Treasury will only have $30 billion in cash by Oct. 17, putting the nation on the brink of default. http://www.marketwatch.com/story/us-stocks-up...2013-09-26