US stocks edge higher on hopes for debt talks

Associated Press
In this Wednesday, Oct. 9, 2013 photo, trader Frank O'Connell, right, works, on the floor of the New York Stock Exchange. U.S. futures are down sharply, Monday, Oct. 14, 2013, as the nation heads into the third week of a partial government shutdown. (AP Photo/Richard Drew)
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In this Wednesday, Oct. 9, 2013 photo, trader Frank O'Connell, right, works, on the floor of the New York Stock Exchange. U.S. futures are down sharply, Monday, Oct. 14, 2013, as the nation heads into the third week of a partial government shutdown. (AP Photo/Richard Drew)

NEW YORK (AP) — Stocks turned higher in afternoon trading Monday as investors waited for news of a possible deal to raise the debt ceiling before Thursday's deadline.

The stock market started lower after negotiations between the White House and Congressional Republicans broke down over the weekend. Indexes started to erase their losses around midday following news that President Barack Obama will meet with Congressional leaders in both parties later Monday to keep negotiations going. By 1 p.m. all three major U.S. indexes were higher.

The Dow Jones industrial average was up 21 points, or 0.1 percent, at 15,259 as of 1:28 p.m. Eastern. The index fell as much as 100 points earlier in the day.

The Standard & Poor's 500 index added two points, or 0.1 percent, at 1,705. The Nasdaq composite rose 11 points, or 0.3 percent, to 3,803.

The United States will reach the limit of its borrowing authority on Thursday, according to estimates from the Treasury Department. If the debt ceiling is not raised, investors fear the U.S. could default on its borrowings in the coming weeks.

Monday's modest gains follow a surge in the market last week on signs of progress between House Republicans and the White House. President Obama will meet with congressional leaders at the White House at 3 p.m. Eastern, which was a change from this weekend, where the latest news telegraphed that Washington was at an impasse.

Investors continue to express hope that a deal can be reached before the debt crisis causes any lasting damage. In the last few years, political deals over major budget disputes have gone down to the last minute.

"We don't need some well-crafted, detailed deal," said Quincy Krosby, market strategist with Prudential Financial. "We just need to buy some time so they can keep negotiating."

The U.S. government remains partially shut down because House Republicans want to attach conditions to a budget bill that would scale back the country's new health care law. President Barack Obama is insisting that the government be reopened without strings attached. The partial shutdown is entering its third week.

Investors have a busy week of corporate earnings to work through. Coca-Cola, Johnson & Johnson and Citigroup report their results Tuesday.

Bond trading is closed in observance of Columbus Day.

Among stocks making big moves:

— Netflix rose $18.74, or 6 percent, to $319.50 after The Wall Street Journal reported that the video streaming service is in talks to offer its services to cable companies.

— Merck & Co. fell 53 cents, or 1 percent, to $46.76 after another analyst lowered his rating on the drug developer, which recently announced job cuts and is dealing with the expiration of patents protecting key products.

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