On Monday, both the S&P and the Nasdaq reached new record highs as investors waged that U.S. lawmakers would come to an agreement to end a federal government shutdown and as burst of deals lifted outlooks.
U.S. senators were scheduled for a lunchtime vote on a funding bill, following this weekend’s failed attempts to come to an agreement for the funding of government operations.
“What you’re seeing is the belief that they will ultimately, whether it’s today or in the next few days, come to some kind of a bipartisan agreement on the budget, and the market is reflecting its confidence,” said Ryan Larson, head of U.S. equity trading at an asset management group.
At 11:03 a.m. EST, the S&P 500 was up 7.34 points, or 0.26 percent, at 2,817.64 and the Nasdaq Composite was up 35.90 points, or 0.49 percent, at 7,372.28. The Dow Jones Industrial Average was down 12.79 points, or 0.05 percent, at 26,058.93.
Industrial stocks weighed on the Dow, led by a 1.3 percent fall in General Electric after a downgrade and price target cut by Bank of America-Merrill Lynch. The stock dropped under $16 a share for the first time since 2011, extending a losing streak from last week.
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Defense stocks such as Boeing, Northrop Grumman and L3 Technologies all fell between 0.6 percent and 1.1 percent, bringing down the Dow Jones U.S. Defense sector index 0.7 percent.
Meanwhile, the Nasdaq was boosted by a flurry of biotech deals, with the biotech index gaining around 2.3 percent.
Shares of U.S. hemophilia specialist Bioverativ rose an eye-opening 63 percent following the French healthcare group Sanofi agreement to purchase the company for $11.6 billion. Juno Therapeutics climbed nearly 27 percent after Celgene agreed to purchase the biotech for about $9 billion.
Nine of the 11 major S&P sectors were higher, driven by a 1.1 percent increase in the energy index and 0.9 percent increase in utilities index.
Advancing issues outnumbered decliners on the NYSE by 1,498 to 1,258. On the Nasdaq, 1,401 issues fell and 1,380 advanced.