U.S. stocks bounce back as government shutdown seen short-lived
* U.S. government shutdown could hurt markets if prolonged
* Apple shares jump on Icahn dinner with CEO Cook
* Indexes up: Dow 0.4 pct, S&P 0.7 pct, Nasdaq 0.9 pct
NEW YORK, Oct 1 (Reuters) – U.S. stocks started off a new month and a new quarter with gains on Tuesday as investors appeared confident that the first partial government shutdown in nearly two decades would be short-lived.
Trading volume was modest, with just about 3.9 billion shares traded with less than two hours to go in the session. The daily average volume has been around 6.3 billion shares this year.
Congress missed a midnight deadline to agree on a spending bill, resulting in up to 1 million workers being put on unpaid leave. A bipartisan fight over President Barack Obama’s healthcare law was at the center of the impasse.
The Democratic-led U.S. Senate on Tuesday voted to kill Republicans’ latest attempts to modify an emergency government funding bill, stripping proposed amendments from the spending bill and sending back to the House a “clean” bill that would extend funding for government agencies until Nov. 15.
“This time around, the markets have been so blissfully unconcerned that this hasn’t been a problem. It could start to bite now, of course. But for me, the main story is the number of people not receiving paychecks or producing output,” said Eric Lascelles, chief economist at RBC Global Asset Management in Toronto.
Lascelles said he estimates that each week the shutdown persists will shave about 0.1 percentage point from fourth-quarter GDP.
“It’s a material hit but certainly one that can be absorbed. The question will be whether it lasts longer than the market expects and starts to bleed into confidence.”
The Dow Jones industrial average was up 52.85 points, or 0.35 percent, at 15,182.52. The Standard & Poor’s 500 Index was up 11.05 points, or 0.66 percent, at 1,692.60. The Nasdaq Composite Index was up 35.65 points, or 0.95 percent, at 3,807.13.
In the latest economic data, the Institute for Supply Management’s manufacturing index came in at 56.2, up from the previous month and above expectations for a reading of 55.
