Strategist: 'History says that investors have little to fear from government shutdowns'
U.S. stock-market indexes shook off concerns about a partial government shutdown after the Senate approved a procedural bill that would allow government to end a multiday shutdown.
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Read:Recap of Senate vote on reopening the federal government (http://www.marketwatch.com/story/live-blog-of-senate-vote-on-re-opening-the-federal-government-2018-01-22)
What are the main benchmarks doing?
The S&P 500 rose 14 points, or 0.5%, to 2,824 with nine of its 11 main sectors, led by energy and telecommunication services.
The Nasdaq Composite Index was up 53 points, or 0.7%, at 7,389. Earlier the technology-laden index touched an intraday record at 7,392.06, thanks to a jump in biotechnology stocks. The iShares Nasdaq Biotechnology ETF (IBB) was up 2.8% fueled by a flurry of merger news in the industry (http://www.marketwatch.com/story/biotech-etf-rallies-on-merger-news-on-track-for-highest-close-since-2015-2018-01-22).
The Dow Jones Industrial Average gained 67 points, or 0.3%, to 26,139.
What are strategists saying?
"Investors have learned from history that shutdowns don't impact markets, so it's not surprising to see stock prices higher," said Kristina Hooper, chief global market strategist at Invesco.
"The biggest geopolitical risk to markets in the long term is trade-protectionist policies. In the short-term, the wrangling over the debt ceiling is likely to spook investors a lot more than shutdown does because the impact on markets is direct," Hooper said.
"History says that investors have little to fear from government shutdowns, as four of the seven in the past 35 years were accompanied by price declines that averaged only 1.0% and required less than two weeks to get back to break even," said Sam Stovall, CFRA's chief investment strategist, in a note late Sunday.
"We think this shutdown will also be a nonevent," Stovall added.
Still, Eric Winograd, senior U.S. economist at AllianceBernstein, noted that each week of shutdown will result in about a 0.2% decline in gross domestic product, even though much of that is recouped after the government resumes business.
See:This is what happens in the stock market when the government shuts down (http://www.marketwatch.com/story/heres-how-the-stock-market-has-handled-past-government-shutdowns-2018-01-16)
And read:A shutdown 'could reintroduce investors to the fact that markets go down' (http://www.marketwatch.com/story/a-government-shutdown-could-reintroduce-investors-to-the-fact-that-markets-go-down-2018-01-22)
What's driving markets?
Lawmakers failed Sunday to end the federal government closure, as negotiations over immigration continued to roil Capitol Hill. However, on Monday, the Senate approved a procedural vote (http://www.marketwatch.com/story/compromise-seems-far-off-on-second-day-of-government-shutdown-2018-01-21) that would keep the government funded through Feb. 8. The next step would be for Senate to pass the actual bill to finance the government and send it to the House.
A reading on the Chicago Federal Reserve's national activity index rose to 0.27 in December from 0.11 in November.
Check out:GDP report could fall victim to government shutdown (http://www.marketwatch.com/story/gdp-report-could-fall-victim-to-government-shutdown-2018-01-19)
Also see:MarketWatch's Economic Calendar (http://www.marketwatch.com/economy-politics/calendars/economic)
Which stocks look like key movers?
Apple Inc.'s stock (AAPL) traded 0.6% lower amid fresh concerns about iPhone X sales, with the worries weighing on the Silicon Valley giant's suppliers in Asia (http://www.marketwatch.com/story/asian-markets-unfazed-by-us-government-shutdown-2018-01-21).
Celgene Corp.(CELG) said it plans to buy Juno for $9 billion (http://www.marketwatch.com/story/celgene-to-acquire-juno-therapeutics-for-9-billion-or-87-a-share-2018-01-22), and Sanofi SA(SAN.FR)(SAN.FR) said it would acquire Bioverativ for $12 billion (http://www.marketwatch.com/story/sanofi-to-acquire-bioverativ-for-116-billion-2018-01-22-24852329). The news lifted Juno Therapeutics Inc.(JUNO) by 27% and Bioverativ Inc.(BIVV) by 62%. Celgene shares edged up 0.3%, while Sanofi shares dropped 3.2%.
In other deal news, BioCryst Pharmaceuticals(BCRX) and Idera Pharmaceuticals(IDRA) agreed to merge. BioCryst skidded 9.5%, while Idera sank 22%.
Insurance company Validus Holding Ltd.'s shares (VR) soared 44% after giant insurer American International Group Inc.(AIG)announced it is buying it for about $6 billion (http://www.marketwatch.com/story/aig-to-acquire-validus-for-556-billion-2018-01-22). AIG shares were down 0.9%.
Shares in Halliburton Co.(HAL) traded 4.9% higher after the oil-field services provider released better-than-expected quarterly results (http://www.marketwatch.com/story/halliburton-shares-rise-after-q4-profit-revenue-beats-2018-01-22).
Shares of Xerox Corp (XRX) rose 1.8% after The Wall Street Journal reported that the company's biggest and third-biggest investors, billionaires Carl Icahn and Darwin Deason, have formed an alliance and plan to encourage the printer and copier giant to explore a potential sale.
Streaming-video pioneer Netflix Inc.(NFLX) is due to report after the close. Shares of the company were up 2.4%.
See:Netflix earnings--did price increases send customers packing? (http://www.marketwatch.com/story/netflix-earnings-analysts-await-update-on-how-price-increases-are-affecting-growth-2018-01-17)
And read:As stocks rocket to records, Ameritrade to roll out round-the-clock trade (http://www.marketwatch.com/story/as-stock-market-rockets-to-records-td-ameritrade-to-roll-out-round-the-clock-trade-2018-01-22)
What are other assets doing?
The ICE U.S. Dollar Index (http://www.marketwatch.com/story/dollar-holds-steady-as-investors-wait-for-shutdown-developments-2018-01-22) was modestly lower as traders waited for developments on the shutdown. European stocks (http://www.marketwatch.com/story/european-stocks-wobble-around-2-12-year-high-as-ubs-falls-washington-wrestles-2018-01-22)rose, and Asian markets closed mostly higher (http://www.marketwatch.com/story/asian-markets-unfazed-by-us-government-shutdown-2018-01-21). Gold futures and oil futures (http://www.marketwatch.com/story/oil-prices-edge-up-after-saudi-urges-producers-to-cooperate-into-2019-2018-01-22) were slightly lower.
--Victor Reklaitis contributed to this article.
(END) Dow Jones Newswires
January 22, 2018 15:10 ET (20:10 GMT)