Reluctance on Wall Street over US debt ceiling debate

Reluctance on Wall Street over US debt ceiling debate

At the start of the trading week, investors on Wall Street focused on the US debt ceiling. US President Joe Biden said he would speak with congressional leaders on Tuesday about the increase sought by Democrats. On Sunday, Biden indicated he was optimistic about reaching an agreement. But Kevin McCarthy, the Republican speaker of the US House of Representatives, is less optimistic.

“We’re not even close to a deal,” McCarthy said Monday, adding that talks with Democrats “have not been productive in any way.” If the debt ceiling is not raised, the US will soon be unable to make some payments, leading to major financial unrest worldwide. According to World Bank CEO David Malpass, the US government’s default risk has already added further economic uncertainty to the world.

Investors were reluctant to react pending further developments. The Dow Jones Industrial Average rose 0.1 percent to 33,348.6, while the broader S&P 500 rose 0.3 percent to 4,136.28. The technical benchmark Nasdaq showed a relatively large increase of 0.7 percent to 12,365.21 points.

Xbox maker Microsoft and games company Activision rose 0.2 percent and 1.2 percent, respectively. The European Commission approved the companies’ merger plans on Monday. Microsoft’s acquisition is valued at $69 billion. The British competition watchdog had previously blocked the takeover. Companies in the United States are also mired in trouble, meaning the gaming industry’s biggest-ever acquisition is uncertain.

Western Digital gained 11.3 percent. The US technology company, which makes hard drives and storage equipment, will accelerate merger talks with Gioxia, Reuters news agency reported. The Japanese company is the former chip branch of Toshiba Technology Group.

Magellan Midstream Partners also rose sharply, up 13 percent. The US oil pipeline operator was snapped up by US gas giant Oneok for about $18.8 billion, which lost 9.1 percent.

The euro was at $1.0875, with European stocks closing at $1.0872. U.S. oil prices rose 1.6 percent to $71.15 a barrel. Brent crude rose 1.5 percent to $75.27.

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