Why the S&P 500 Surged Above 1,700 Last Week
Stocks rallied sharply at the end of last week, after news spread that lawmakers may be zeroing in on a compromise to the current impasse over the federal budget and debt limit. The S&P 500 closed at 1,703 on Friday, the first time it's eclipsed the 1,700-point threshold since the middle of last month.
House Republicans put forward a proposal on Thursday that would increase the Treasury Department's ability to borrow through Nov. 22 -- it currently expires on Oct. 17 -- but conditioned it on the White House's agreement to hold more expansive talks about overhauling the budget. Talks broke down again today, however, after the president refused to negotiate on the latter.
Earlier in the week, a number of high-profile companies kicked off third-quarter earnings season. The former bellwether Alcoa reported on Wednesday that its earnings came in better than many analysts had expected. Thanks to improvements in its smelting and aerospace units, the company reported earnings per share of $0.02, compared with a loss of $0.11 per share in the same period last year.
And on Friday, two of the nation's largest lenders announced mixed results. JPMorgan Chase announced its first quarterly loss under Jamie Dimon's tenure and the first such loss for the bank in nearly a decade. The company was heavily weighed down by legal costs stemming from a multitude of legal and regulatory actions, as it took a $9.2 billion charge to build its reserves to cover future related expenses.
Meanwhile, its West Coast counterpart Wells Fargo saw earnings rise once again to record levels, reporting earnings per share of $0.99. While its mortgage originations fell precipitously, loan growth and improvements in a variety of other noninterest income areas pushed the bottom line to record heights.
Three stocks that are immune to Washington's squabbling
With the budget impasse still at a standstill, there's every reason to believe that next week will offer yet more volatility in the markets. One way to avoid the anxiety that typically accompanies times like these is to hold stocks in America's best and brightest companies.
Our analysts have developed a list of three such stocks that fit these criteria and they've made it available in our popular free report about three stocks to own forever. If you're interested in downloading this free report instantly, simply click here now.
The article Why the S&P 500 Surged Above 1,700 Last Week originally appeared on Fool.com.John Maxfield has no position in any stocks mentioned. The Motley Fool recommends Wells Fargo and owns shares of JPMorgan Chase and Wells Fargo. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
Copyright © 1995 - 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.