The Standard & Poor’s 500 Index rose to a record and Treasuries rallied as the U.S. raised the debt ceiling and reopened the government. International Business Machines Corp. and Goldman Sachs Group Inc. led the Dow Jones Industrial Average lower, while the dollar weakened.
Treasury 10-year note yields fell to the lowest level in more than a week on speculation the Federal Reserve will maintain its bond-buying program into next year after the government shutdown weighed on economic growth.
The dollar retreated from a three- week high versus the yen after encountering so-called technical resistance and as the short-term debt deal passed by U.S. Congress failed to end political uncertainty.
Anyone who remembers the collapse of Lehman Brothers Holdings Inc. little more than five years ago knows what a global financial disaster is. A U.S. government default, just weeks away if Congress fails to raise the debt ceiling as it now threatens to do, will be an economic calamity like none the world has ever seen.
The partisan battles over the U.S. government shutdown and a potential debt default are beginning to merge into a single fiscal fight, raising the stakes for Republicans and Democrats to end the impasse.
Russ Koesterich, the San Francisco- based global chief investment strategist for the IShares unit of BlackRock Inc., comments on U.S. Federal Reserve Chairman Ben S. Bernanke’s statement today in Jackson Hole, Wyoming.