NEW YORK (MarketWatch) — U.S. stocks were mostly up on Wednesday, with the Dow industrials and the S&P 500 near session highs, as House leaders met on Capitol Hill and the government shutdown marked a ninth day.
"I think we're getting a glimmer of hope. There seems to be a conversation going in the background that the way to exit this mess is a short-term lifting of the debt ceiling and as a reward an agreement for both sides to sit down and discuss budget issues," said Art Hogan, a market strategist at Lazard Capital Markets LLC.
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Yellen is Obama's choice as Fed chief President Barack Obama plans to announce Wednesday he is nominating Federal Reserve Vice Chairwoman Janet Yellen to become the central bank's new leader. If confirmed, she would be the first female central bank chair. Jon Hilsenrath reports. Photo: AP.
House leaders from both parties met on Wednesday. In addition, President Barack Obama set meetings with Republican and Democratic lawmakers to discuss the budget standoff that has shut down the government and prompted concerns about the nation's debt ceiling.
The stock market offered little reaction to the Federal Reserve's release of minutes from its September meeting, at which the Fed unexpectedly refrained from tapering its $85 billion in monthly asset purchases. The minutes showed most Fed members thinking it would still make sense to scale back bond buying this year. Janet Yellen, vice chairwoman of the Federal Reserve, will be nominated to succeed Ben Bernanke as Fed chief, with an announcement expected this afternoon.
After a 52-point drop, the Dow Jones Industrial Average (DJIA) was lately up 46.75 points, or 0.3%, at 14,822.57.
The S&P 500 index (SPX) rose 2.6 points, or 0.2%, to 1,658.05, with telecommunications the best performing and energy faring the worst among its 10 major industry sectors.
Darden Restaurants Inc. (DRI) shares jumped 7.4%. The Wall Street Journal, citing people familiar with the matter, reported hedge fund Barington Capital LP had taken a 2.8% stake in the owner of the Olive Garden and Red Lobster restaurants, and was pushing for Darden to split in two.
Shares of Hewlett-Packard Co. (HPQ) rallied 7% after Chief Executive Meg Whitman said the company is poised to see "pockets of growth" in 2014.
Alcoa Inc. (AA) rose 4.5%, a day after the aluminum producer reported better-than-anticipated quarterly earnings. Read more on Alcoa results.
Shares of Jos. A. Bank Clothiers Inc. (JOSB) and Men's Wearhouse Inc. (MW) both rallied after Men's Wearhouse spurned the former's buyout offer.
• Government shutdown: Track the latest news out of Washington »/conga/story/2013/10/governmentshutdownstream.html 282136
The Nasdaq Composite (COMP) declined 9 points, or 0.3%, to 3,685.69.
For every seven stocks falling, roughly eight gained on the New York Stock Exchange, where 387 million shares traded as of 2:10 p.m. Eastern.
Composite volume approached 2.3 billion shares.
U.S. stocks fell sharply in the last two sessions, with the S&P 500 ending Tuesday at the lowest level since Sept. 6, hit by worries about the government shutdown and looming debt-ceiling deadline.
"I wish I could be watching earnings and economic data, but the goofiness in Washington is pretty much taking all the air out of the room," said Paul Nolte, managing director at Dearborn Partners.
"The market is starting to slowly price in a chance of default; we don't pay our bills, everybody takes a look at the U.S. a little differently at that point. That's part of why I think we'll get a deal, but it's politics not finance," said Nolte, who believes the stock market could drop as much as 10% should politicians fail to hike the nation's debt ceiling before an Oct. 17 deadline.
Treasury prices fell, with the yield on the 10-year note (10_YEAR) used in figuring mortgages and other consumer loans up 3 basis points at 2.663%.
The dollar (DXY) gained against the currencies of major U.S. trading partners, including the yen (USDJPY) and the euro (EURUSD) , while the price of dollar-denominated commodities declined, with oil futures off $1.86, or 1.8%, at $101.63 a barrel and gold futures down $17.40, or 1.3%, to close the floor session at $1,307.20 an ounce.
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