U.S. stocks rally with Dow jumping over 500 points

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NEW YORK, Oct. 7 (Xinhua) — U.S. stocks rose on Thursday with the Dow jumping more than 500 points in morning trading.

The Dow Jones Industrial Average climbed 535.56 points, or 1.56 percent, to 34,952.55. The S&P 500 increased 65.48 points, or 1.50 percent, to 4,429.03. The Nasdaq Composite Index was up 236.49 points, or 1.63 percent, to 14,738.48.

All the 11 primary S&P 500 sectors advanced in morning trading, with materials up 2.3 percent, leading the gains.

Investors eyed updates on the debt ceiling standoff in Washington.

U.S. Senate Republicans on Wednesday proposed extending the federal government’s debt limit into December in order to avert a looming debt default.

The proposal came after U.S. President Joe Biden earlier Wednesday held a virtual meeting with business leaders to discuss the dangers of the U.S. defaulting on its debt, stepping up pressure on Republicans to raise the debt limit.

U.S. Treasury Secretary Janet Yellen said on Tuesday that she fully expected the U.S. economy to fall into a recession if Congress failed to raise the debt limit.

“Optimism that a debt ceiling solution will be reached before the Oct. 18th deadline (and maybe much sooner) was a positive for the market. While nobody was really expecting this to go unresolved and risk a default, one never knows,” Kevin Matras, executive vice president at Zacks Investment Research, said Thursday in a note.

The debt limit, commonly called the debt ceiling, is the total amount of money that the U.S. government is authorized to borrow to meet its existing legal obligations, including social security and medicare benefits, interest on the national debt, and other payments.

On the economic front, the Department of Labor said U.S. initial jobless claims, a rough way to measure layoffs, decreased by 38,000 to 326,000 in the week ending Oct. 2. Economists polled by The Wall Street Journal had estimated new claims would drop to a seasonally adjusted 345,000.

The more closely-watched September U.S. jobs report will be released by the Labor Department’s Bureau of Labor Statistics on Friday, which will include employment data from both the private sector and the government.