At the Open: Stocks Gain on Deal Hope; Potbelly IPO More Than Doubles

Hopes for a deal that would end the government shutdown have helped lift stocks higher today.

AP

The S&P 500 has gained 0.4% to 1,685.14, while the Dow Jones Industrial Average has risen 0.3% to 15,036.93. The small-cap Russell 2000 has gained 0.4% to 1,075.16.

Stocks have gained despite the fact that government shutdown has delayed the release of today’s payrolls report.  Nomura explains why economic data could be impact for quite a while:

If the shutdown goes on for more than a few days its impact on subsequent data is unclear. The shutdown could affect data collection for the month of October. For example, the Current Population Survey (which is the source of household employment data) is conducted every month during the week that includes the 12th of the month. If the shutdown runs into next week, data collection could be affected. In that case, it is unclear if the BLS would delay or cancel October's survey. Even if data collection is, in the end unaffected, the shutdown will delay processing of the raw source data. Consequently, the data release schedule is likely to be disrupted for some time after the shutdown is over. We will not know exactly how the data release schedule will be affected until the shutdown is over.

Alliance Bernstein’s Joseph Carson notes that the longer the impasse goes on, the more damage will be done to U.S. fiscal credibility. He explains what would help restore confidence:

The final chapter on the current fiscal crisis cannot be written at this time, without knowing what policy decisions will emerge from the resolution of the deadlock. While the crisis has been managed badly so far, we believe that Congress and the administration still have time to right their wrongs, especially if they can secure a deal for a budget that includes entitlement and tax reform and extends the debt ceiling for a significant period of at least two years. This would help ensure that the US government maintained the confidence and trust of the global investor community.

MoneyGram International (MGI) has gained 2.8% to $18.94 after it was upgraded to Buy from Neutral at Compass Point.

U.S. Airways (LCC) has gained 0.2% to $20.53 after it was downgraded to Fair Value from Buy at CRT Capital.

Chico’s FAS (CHS) has dropped 1.5% to $16.82 after it was cut to Market Perform from Outperform at Wells Fargo.

Intrepid Potash (IPI) has fallen 1.3% to $16.00 after it was downgraded to Underweight from Equal Weight at Morgan Stanley.

Shares of Potbelly (PBPB) rose 129% $32 on their first day of trading.