Stocks climb as debt ceiling deal optimism grows
STORY: U.S. stocks closed higher on Thursday on mounting optimism that a U.S. debt ceiling deal could be reached within days. Discount retailer Walmart provided additional support after it raised its sales and profit forecast. Shares gained one percent.
The Dow added one-third of one percent, the S&P 500 rose close to one percent and the Nasdaq increased one-and-one-half percent.
Republican Speaker of the House Kevin McCarthy said a deal to raise or suspend the debt ceiling could potentially be reached in time to hold a House vote next week.
And Walmart reported better-than-expected first-quarter results and boosted its full year outlook as consumers continue to spend something reflected in recent economic data.
The strong consumer spending has surprised Loreen Gilbert, CEO of WealthWise Financial who doesn’t think it will last.
"So what we're seeing right now is that the consumer has continued to be resilient, much more than we expected the the consumer to be able to be. And in fact, Walmart made that comment today as they made had their earnings call and stated that the consumer has been surprisingly resilient and that's what we would say It has been surprising. So, given that interest rates have gone up and to purchase things cost more with the inflation-- All of these factors-- and yet still we're seeing the consumer spend, we're especially seeing the consumer continue to spend on services. So travel, hotels, all of those items continue to be strong. Eventually we'll start to see those things deteriorate as we get into a recessionary environment."
She believes the U.S. economy will enter a recession in the third quarter though strong data continues to come in: Thursday the number of Americans filing new claims for jobless benefits fell more than expected, suggesting the labor market remains tight.
Netflix soared nine percent after saying its recently launched ad-supported tier reached nearly 5 million active users per month.
And chipmaker Micron technology gained four percent. It plans to invest up to nearly four billion dollars in Japan for new chips over the next few years.