The stock market hit an all-time high in the US overnight, as Wall Street put the government shutdown and debt ceiling crisis behind it and focused on corporate earnings.
The Standard & Poor's 500 index rose 11.61 points, or 0.7 per cent, to close at 1,733.15 a record close. Nine of the 10 industry groups in the index finished higher, with technology the only group that fell.
Wall St returns to normalcy:
The market rose throughout the day as investors got back to focusing on corporate earnings and economic data. American Express and Verizon rose the most in the Dow Jones industrial average after reporting earnings that beat expectations from financial analysts.
The Dow ended the day down two points, or 0.01 per cent, to 15,371.65. The index of 30 big US companies was held back by declines in IBM, Goldman Sachs and UnitedHealth.
IBM's third-quarter revenue fell and missed Wall Street's forecast by more than $1 billion. The stock closed down $11.90, or 6 per cent, to $174.80. Earlier, it had touched its lowest level of the past year $172.57
Goldman Sachs also weighed down the index. The investment bank's revenue fell sharply as trading in bonds and other securities slowed. Goldman fell $3.93, or 2.4 per cent, to $158.32.
The focus on earnings is a change of pace for Wall Street, which had been absorbed in Washington's political drama over the last month.
Now that the US has avoided the possibility of default, at least for a few months, earnings news is expected to dominate trading for the next couple weeks. So far, only 79 companies in the S&P 500 have reported third-quarter results, according to S&P Capital IQ. Analysts expect earnings at those companies to increase 3.3 per cent over the same period a year ago.
"I don't think we can completely close the door on the debt ceiling chapter just yet, but we can get back to the stuff that really matters," said Jonathan Corpina, who manages trading on the floor of the New York Stock Exchange for Meridian Equity Partners.
Other indexes also posted noticeable gains. The Nasdaq composite closed up 23.71 points, or 0.6 per cent, to 3,863.15.
The Russell 2000 index, which is made up of primarily smaller, riskier companies, also hit an all-time high. It closed up 9.85 points, or 0.9 per cent, to 1,102.27 and has risen nearly 30 per cent this year.
Market analysts think the 16-day partial shutdown of the government caused billions of dollars of damage to the economy. Government employees were furloughed, contracts were delayed, and tourism declined at national parks.
Analysts at Wells Fargo said the shutdown likely lowered economic growth by 0.5 percentage point.
There remain broader concerns that Democrats and Republicans won't be able to draw up a longer-term budget. The deal approved late Wednesday only permits the Treasury Department to borrow through February 7 and fund the government through January 15.
"The agreement represents another temporary fix that pushes fiscal uncertainty into the early months of next year," Wells Fargo analysts said.
Shutdown helped US foes, says Obama:
Despite the worries, signs of normalcy returned to financial markets on Thursday.
The one-month Treasury bill was back to trading at a yield of 0.01 per cent, about where it was a month ago, and down sharply from 0.35 per cent on Tuesday.
Usually a staid, conservative security, the one-month T-bill was subjected to a wave of selling at the beginning of the month. Investors feared the T-bill would be the first piece of government debt to be affected by a US default if the debt ceiling was breached and the federal government could no longer pay its obligations.
The yield on the more closely-watched 10-year Treasury note fell to 2.60 per cent from 2.67 per cent Wednesday.
Among other stock moves:
Verizon rose $1.65, or 4 per cent, to $48.90. The telecommunications company earned an adjusted 77 cents per share for the recent quarter, beating expectations of financial analysts.
UnitedHealth Group dropped $3.82, or 5 per cent, to $71.37. The health insurance giant narrowed its 2013 profit forecast, instead of raising it, giving some analysts pause.