Stock futures rally as Senate reaches deal to avert shutdown

Fed can’t raise rates too high, US economy can’t afford debt: Investment manager

Navellier & Associates founder Louis Navellier argues the debt on budget deficit is larger than the U.S. defense department budget, which will result in low interest rates. 

U.S. stock futures were pointing to gains on the final day of the third quarter as the Senate reached a deal to avoid a government shutdown.

Dow Jones Industrial Average futures rose 119 points, or 0.35%, while S&P 500 futures and Nasdaq 100 futures advanced 0.36% and 0.4%, respectively. 

The Senate reached a stopgap deal overnight that would fund the government until early December. Congress must pass the bill before midnight to avoid a shutdown. Lawmakers must still raise the debt ceiling by Oct. 18 to prevent the U.S. from defaulting on its debt. 

SCHUMER SAYS DEAL REACHED FOR VOTE TO AVOID GOVERNMENT SHUTDOWN

Additionally, House Speaker Nancy Pelosi is still trying to iron out plans to bring both infrastructure bills up for vote in the lower chamber. 

Initial jobless claims and a revised reading for second-quarter gross domestic product will be released at 8:30 a.m. ET. 

Ahead of the data, the yield on the 10-year note was up 1 basis point at 1.53%. 

In stocks, interest-rate sensitive financials, like Bank of America Corp. and Wells Fargo & Co., edged higher.

So too did the recently underperforming growth names, including Microsoft Corp. and Apple Inc., that typically lag in an environment of rising rates. 

Meanwhile, CarMax Inc. reported record quarterly sales, but its profit fell short of analyst expectations. 

Kohl's Corp. received a two-notch downgrade to "underperform" at Bank of America, which said supply chain disruptions could impact the retailer’s recovery plans. 

Elsewhere, Perrigo Co. agreed to a 297 million euro settlement over an Irish tax dispute. The figure is just a fraction of the 1.64 billion euros bill that was initially levied against the company.  

In deals, Merck & Co. will buy drugmaker Acceleron Pharma Inc. for $180 per share, or about $11.5 billion. The deal represents a 2.65% premium from where Acceleron shares settled Wednesday.

In commodities, West Texas Intermediate crude oil slipped 17 cents to $74.66 a barrel and gold ticked up 30 cents to $1,723.20 an ounce.  

Overseas trading was choppy. 

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In Europe, Germany’s DAX 30 slid 0.29% while France’s CAC 40 was unchanged and Britain’s FTSE 100 rose 0.25%. 

Asian bourses were mixed with China’s Shanghai Composite index climbing 0.9%, Japan’s Nikkei 225 losing 0.31% and Hong Kong’s Hang Seng index declining 0.36%. 

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