Trader William Lawrence on the floor of the New York Stock Exchange. (AP/Richard Drew)
Trader William Lawrence on the floor of the New York Stock Exchange.
(AP/Richard Drew)

Talk of a pending deal to stave off a government default on obligations and possible reopening of federal agencies sent stocks back up Monday, reversing an earlier loss and sending optimism around the floor of the New York Stock Exchange.

“We expect there will be an agreement in the next day or so, but there’s a lot of fear,” said Ralph Bassett, deputy head of North American equities at Aberdeen Asset Management in Philadelphia.

Stocks dipped earlier in the day following to reach any kind of deal to end the stalemate but Majority Leader Harry Reid and Minority Leader Mitch McConnell joined together on the Senate floor Monday afternoon and expressed confidence that a deal would be reached and the matter resolved before the government defaults on its debts Thursday.

“Bringing everyone together was enough to get us to come back after opening quite a bit lower,” Bassett told Reuters Monday, “but we’re still under the assumption that we’re at an impasse.”

Economists view a government default as catastrophic and also feel that the government shutdown, now in its third week, is driving down the GDP.

Still, expectations that a deal is near was enough to reverse the downward trend and offset the early morning fears.

“Let’s hope we can get through this thing and move forward,” a trader told Capitol Hill Blue in an email on Monday.  “We’ve got our fingers crossed.”

 

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Doug Thompson published his first story and photo at age 11 -- a newspaper article about racism and the Klan in Prince Edward County, VA, in 1958. From that point on, he decided to become a newspaperman and did just that -- reporting news and taking photos full-time at his hometown paper, becoming the youngest full-time reporter at The Roanoke Times in Virginia in 1965 and spent most of the past 55+ years covering news around the country and the globe. After a short sabbatical as a political operative in Washington in the 1980s, he returned to the news profession in 1992. Today, he is a contract reporter/photojournalist for BHMedia and owns Capitol Hill Blue and other news websites.