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US open: Stocks higher even as government shutdown looms
Wall Street's main market gauges are trading mostly higher despite a downbeat close the day before, as investors put aside their concerns about a possible government shutdown ahead of a key Senate vote.
By 1639 GMT, the Dow Jones Industrial Average was off by 0.21% or 54.52 points to 25,963.40, alongside a gain of 0.12% or 3.05 points in the S&P 500 to 2,800.94 and an advance of 0.26% or 18.57 points for the Nasdaq Composite to 7,311.38.
Overnight, the House of Representatives voted 230-197 to pass a one-month spending bill, but it could be derailed if there was enough opposition in the Senate.
The Senate had taken an initial vote but needs an additional procedural step that requires 60 votes, meaning the Republicans needed the help of at least nine Democrats to pass the bill.
IG analyst Joshua Mahony said: "Tensions are rising amid a potential government shutdown in the US, with the senate failing to even schedule a vote, let alone pass a vote to stave off another shutdown. Despite a proposition from the House to provide a stopgap solution, there is clear opposition from the Democrats in the Senate, with the immigration policy DACA at the centre of the fight. With an agreement needed by midnight, there is a real possibility that we will see a shutdown, helping drive the US dollar lower once more."
Dr.Harm Bandholz at UniCredit Research concurred, pointing out how recent poll results showing broad support for young immigrants under the aegis of the DACA programme enjoyed wide support from Americans, meaning Democrats were likely more than happy to play 'hardball' over the issue.
Polls conducted by CBS and Quinnipiac over the last few days had shown 87% and 73% of Americans, respectovely, in support of DACA.
Nevertheless, the impact on the economy would be "very limited" and while embarassing for the US, financial markets would likely not be perturbed by another display of Washington's dysfunctionality, said Dr.Bandholz.
In corporate news, IBM was under the cosh after reporting a fourth-quarter loss late on Thursday on the back of a one-off $5bn charge from the new US tax system.
American Express was also in focus after posting its first quarterly loss in more than a quarter-century and saying it would suspend its share buybacks.
Schlumberger was also seeing an active day after the oilfield services company's fourth-quarter adjusted profit and revenue beat analysts' expectations.