By Kate Gibson, MarketWatch
NEW YORK (MarketWatch) -- U.S. stocks were mostly up on
Wednesday, with the Dow industrials and the S&P 500 rebounding
after a two-day hit, amid talks to end the partial government
shutdown now in its ninth day and with little more than a week to
go before U.S. borrowing authority expires.
"I think we're getting a glimmer of hope. There seems to be a
conversation going in the background that the way to exit this mess
is a short-term lifting of the debt ceiling and as a reward an
agreement for both sides to sit down and discuss budget issues,"
said Art Hogan, a market strategist at Lazard Capital Markets
LLC.
House leaders from both parties met on Wednesday. In addition,
President Barack Obama will meet with House Republican leaders and
committee chairmen, according to a statement from House Speaker
John Boehner's spokesman.
The stock market offered little reaction to the Federal
Reserve's release of minutes from its September meeting, at which
the Fed unexpectedly refrained from tapering its $85 billion in
monthly asset purchases. The minutes showed most Fed members
thinking it would still make sense to scale back bond buying this
year. Janet Yellen, vice chairwoman of the Federal Reserve, was
nominated Wednesday afternoon to succeed Ben Bernanke as Fed
chief.
After a 52-point drop, the Dow Jones Industrial Average (DJI)
was lately up 68.29 points, or 0.5%, at 14,844.82.
The S&P 500 index (SPX) rose 6.02 points, or 0.4%, to
1,661.47, with telecommunications the best performing and consumer
discretionary the laggard among its 10 major industry sectors.
Darden Restaurants Inc. (DRI) shares jumped 7%. The Wall Street
Journal, citing people familiar with the matter, reported hedge
fund Barington Capital LP had taken a 2.8% stake in the owner of
the Olive Garden and Red Lobster restaurants, and was pushing for
Darden to divide.
Shares of Hewlett-Packard Co. (HPQ) rallied 8.8% after Chief
Executive Meg Whitman said the company is poised to see "pockets of
growth" in 2014.
Alcoa Inc. (AA) rose 3.5%, a day after the aluminum producer
reported better-than-anticipated quarterly earnings. (Read more on
Alcoa results:
http://blogs.marketwatch.com/thetell/2013/10/08/what-alcoas-results-say-about-global-manufacturing/.)
Shares of Jos. A. Bank Clothiers Inc. (JOSB) and Men's Wearhouse
Inc. (MW) both rallied after Men's Wearhouse spurned the former's
buyout offer.
The Nasdaq Composite (RIXF) declined 8.1 points, or 0.2%, to
3,686.74.
For every three stocks falling, roughly four gained on the New
York Stock Exchange, where 457 million shares traded as of 3:10
p.m. Eastern.
Composite volume approached 2.7 billion shares.
U.S. stocks fell sharply in the last two sessions, with the
S&P 500 ending Tuesday at the lowest level since Sept. 6, hit
by worries about the government shutdown and looming debt-ceiling
deadline.
"I wish I could be watching earnings and economic data, but the
goofiness in Washington is pretty much taking all the air out of
the room," said Paul Nolte, managing director at Dearborn
Partners.
"The market is starting to slowly price in a chance of default;
we don't pay our bills, everybody takes a look at the U.S. a little
differently at that point. That's part of why I think we'll get a
deal, but it's politics not finance," said Nolte, who believes the
stock market could drop as much as 10% should politicians fail to
hike the nation's debt ceiling before an Oct. 17 deadline.
Treasury prices fell, with the yield on the 10-year note
(10_YEAR) used in figuring mortgages and other consumer loans up 2
basis points at 2.657%.
The dollar(DXY) gained against the currencies of major U.S.
trading partners, including the yen (USDJPY) and the euro (EURUSD),
while the price of dollar-denominated commodities declined, with
oil futures off $1.88, or 1.8%, at $101.61 a barrel and gold
futures down $17.40, or 1.3%, to close the floor session at
$1,307.20 an ounce.
Subscribe to WSJ: http://online.wsj.com?mod=djnwires