Stock prices surged Thursday on reports negotiations on government spending and the debt ceiling between the Obama administration and Republicans in Congress were making progress.
The major indexes all gained more than 2.2 percent. The Dow Jones Industrial Average gained 323.09 points to 15,126.07. The Nasdaq Composite Index added 82.97 points to 3,760.75, and the Standard & Poor’s 500 Index was up 36.16 points to 1,692.56.
However, after the close of trading, it was announced that the administration is not prepared to accept the Republican plan, and stock futures turned sharply lower.
Oil prices rose $1.40 to $103.01 a barrel after OPEC reported a drop in production. Gold fell $10.30 to $1,296.90 an ounce.
Nike Inc. (NYSE: NKE), Boeing Co. (NYSE: BA) and American Express Co. (NYSE: AXP) rose more than 3.4 percent, leading advances among large companies.
Wells Fargo & Co. (NYSE: WFC) gained 2.7 percent to $41.44 and JPMorgan Chase & Co. (NYSE: JPM) added 3.5 percent to $52.52, propelling financial shares to the biggest gain in 16 months.
Gilead Sciences Inc. (Nasdaq: GILD) jumped 6.5 percent to $62.74 as the largest biotechnology company by market value said the cancer drug idelalisib improved survival times.
About 6.5 billion shares changed hands on U.S. exchanges, 12 percent higher than the three-month average.
Investors reacted to a House Republican proposal for a short-term increase in the debt ceiling that would reduce the prospects for a U.S. default. The plan would push the lapse of U.S. borrowing authority to Nov. 22 from Oct. 17. It wouldn’t end the 10-day-old partial shutdown of the federal government.
President Barack Obama would support a short increase in the U.S. debt limit with no “partisan strings attached,” though he prefers a longer extension, said Jay Carney, the White House press secretary. The proposal could come up for a vote on the House floor as soon as Friday.
A Treasury Department report Oct. 3 said consequences would be “catastrophic” should the U.S. default, including higher interest rates, lower investment and slow growth for decades to come.
A partial federal government shutdown lasting through the end of this week would pare 0.2 percentage point from U.S. economic growth and cost as much as 0.5 point if it continues two more weeks, according to the median estimate in a Bloomberg survey of economists taken Oct. 4 to 9.
Claims for U.S. jobless benefits jumped last week to the highest level in six months, a Labor Department report today showed, providing the first statistical warning that the damage from the partial federal shutdown is starting to ripple through the economy.
Nike advanced 3.6 percent to $73.44. DA Davidson & Co. raised its stock-price estimate for the world’s largest sporting-goods maker to $76 from $75 after the company said Wednesday that annual sales will rise to $36 billion by the end of fiscal 2017.
Financial shares surged 2.9 percent as a group, the biggest rally since June 2012, as all 81 members of an S&P index advanced. American Express, the biggest U.S. credit-card issuer by purchases, jumped 3.4 percent to $74.66.
MetLife Inc. (NYSE: MET) added 3.7 percent to $48.11 and Prudential Financial Inc. (NYSE: PRU) climbed 4.1 percent to $79.07, pacing gains among insurers as bond yields rose. The firms invest funds from clients in bonds and other assets to back future payouts.
Netflix Inc. (Nasdaq: NFLX) rose 5.4 percent to $303.99, snapping a three-day slide. Although Netflix fell 12 percent this week through Wednesday, the stock has more than tripled since the start of the year.
Time Warner Cable Inc. (NYSE: TWC) jumped 6.1 percent to $116.95. The cable company and Univision Communications Inc., a media group that caters to Latinos, agreed to extend their partnership and deliver more content to Time Warner subscribers.
UnitedHealth Group Inc. (NYSE: UNH) surged 3.6 percent to $73.98. The biggest U.S. insurer had the outlook on its credit rating raised to positive from stable by S&P on expectation that the company will strengthen its leadership in the industry.
Citrix Systems Inc. (Nasdaq: CTSX) slumped 12 percent to $58.75 as the technology company reported preliminary third-quarter earnings of 68 cents to 69 cents a share. That missed the average analyst estimate compiled by Bloomberg of 73 cents.
Quest Diagnostics Inc. (NYSE: DGX) slipped 4.9 percent to $58.66. The biggest U.S. operator of medical laboratories said preliminary results showed that, excluding some items, it earned $1.02 a share in the third quarter.
— Bloomberg contributed to this report.