Wall Street edges up with eyes on Washington

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New York - US stocks edged higher on Friday, following the biggest rally since the first trading day of the year, as talks continued in Washington to end a fiscal stalemate that has shut down the government for days.

President Barack Obama will press his case for a quick reopening of the entire federal government, coupled with an emergency increase of US borrowing authority, when he meets with Senate Republicans on Friday.

The partial government shutdown is now in its eleventh day and less than a week remains before an October 17 deadline to extend the government's borrowing authority and avoid a debt default.

The crisis in Washington threatens to damage the fiscal standing of the United States and to derail its fragile economic recovery.

“There seems to be some flexibility now, at least the talks are progressing,” said Tim Ghriskey, chief investment officer of Solaris Group in Bedford Hills, New York

“Once sanity returns, at least temporarily, to Washington the market really should move higher.”

Major US stock indexes staged their strongest rally in more than nine months on Thursday, leaving the S&P 500 less than 2 percent away from its record closing high set three weeks ago.

The S&P financial index slipped 0.1 percent after earnings reports from JP Morgan Chase & Co, which was up 0.6 percent at $52.84, and Wells Fargo & Co, which fell 1.6 percent to $40.76.

JPMorgan, the biggest US bank by assets reported a rare quarterly loss after incurring $9.2 billion in legal expenses. Excluding litigation expense and reserve release, it earned a profit of $5.82 billion, or $1.42 a share.

Wells Fargo & Co, the biggest US mortgage lender reported a 13 percent rise in third-quarter profit, but its mortgage banking income fell sharply as the refinancing boom began to fade.

The Dow Jones industrial average rose 49.84 points, or 0.33 percent, to 15,175.91, the S&P 500 gained 2.84 points, or 0.17 percent, to 1,695.4 and the Nasdaq Composite added 6.728 points, or 0.18 percent, to 3,767.475.

The Thomson Reuters/University of Michigan Surveys of Consumers' preliminary October consumer sentiment index fell to 75.2, its weakest level in nine months, from the final September figure of 77.5, and below expectations of a 76 reading.

Micron Technology Inc fell 3 percent to $17.88 after the chipmaker reported a smaller-than-expected fourth-quarter profit on Thursday. The PHLX semiconductor index lost 0.1 percent. - Reuters



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