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Benchmarks posted modest gains of Friday even as the partial government shutdown continued. Friday’s gains were primarily driven by hopes that lawmakers will conclude a deal on the ongoing budget issue and on increasing the country’s debt limit. Despite Friday’s gains, the Dow Jones and the S&P 500 ended in the red. Nonetheless, the Nasdaq finished in the green for the fifth week in a row. Meanwhile, the third quarter earnings season is slated to kick off this week. Due to the government shutdown, the widely awaited nonfarm payrolls report was not released on Friday. All ten sectors of the S&P 500 industry groups finished in the green, led by materials and energy stocks.

For a look at the issues currently facing the markets, make sure to read today’s Ahead of Wall Street article     
  
The Dow Jones Industrial Average (DJI) gained 0.5% to close the day at 15,072.58. The S&P 500 added 0.7% to finish Friday’s trading session at 1,690.50. The tech-laden Nasdaq Composite Index climbed 0.9% to end at 3,807.75. The fear-gauge CBOE Volatility Index (VIX) declined 5.3% to settle at 16.74. Consolidated volumes on the New York Stock Exchange, American Stock Exchange and Nasdaq were roughly 5.2 billion shares, considerably lower than 2013’s average of 6.1 billion shares. Advancing stocks outnumbered the decliners. For 64% shares that advanced, only 33% declined. 

The Dow slipped 1.2%, the S&P 500 declined 0.1% and the Nasdaq rose 0.7%, over the week. Weakness in the S&P 500 and the blue-chip index was primarily due to political altercations over the ongoing budget issue. Investors are not only concerned about the government shutdown, but are even more worried about the country’s debt ceiling deadline. If lawmakers fail to reach a deal on the budget within the next few days, they might miss the debt ceiling deadline.
 
Stocks kicked off Friday’s trading session on a positive note and traded higher for most of the trading session. But stocks trimmed some gains after Speaker John Boehner said the Congress will not vote on a spending bill without conditions to end the government shutdown. He also demanded spending cuts to raise the government’s debt limit. Meanwhile, President Barack Obama cancelled his trip to Indonesia. According to the White House: "The president made this decision based on the difficulty in moving forward with foreign travel in the face of a shutdown, and his determination to continue pressing his case that Republicans should immediately allow a vote to reopen the government.” 
             
IMF chief Christine Lagarde said the global economy will be affected if U.S lawmakers fail to raise the government borrowing limit by October 17. Lagarde added that the U.S. growth rate can fall below 2% in 2013. Due to the government shutdown nonfarm, payroll numbers were not released on Friday. According to the consensus estimate, nonfarm payroll numbers were expected to increase by 183,000 from the previous month’s figure of 169,000.   

The third quarter earnings season will unofficially begin this week.  Major companies like Yum! Brands, Inc. (NYSE:YUM), Alcoa Inc (NYSE:AA) are scheduled to post quarterly results on Friday. Financial bellwether JPMorgan Chase & Co (NYSE:JPM) and Wells Fargo & Co (NYSE:WFC) are slated to report results on Friday.
 
The materials sector was the biggest gainer among the S&P 500 industry groups and the Materials Select Sector SPDR (XLB) gained 1.5%. Stocks such as Monsanto Company (NYSE:MON), Air Products & Chemicals, Inc. (NYSE:APD), The Dow Chemical Company (NYSE:DOW), Sherwin-Williams Company (NYSE:SHW) and Mosaic Co (NYSE:MOS) added 0.5%, 0.8%, 3.2%, 2.0% and 1.8%, respectively.     
 
The energy sector also had a good day and the Energy Select Sector SPDR (XLE) gained 1.0%. Stocks such as Exxon Mobil Corporation (NYSE:XOM), Hess Corp. (NYSE:HES), ConocoPhillips (NYSE:COP), Murphy Oil Corporation (NYSE:MUR) and Marathon Oil Corporation (NYSE:MRO) increased 1.0%, 0.3%, 1.1%, 1.8% and 2.1%, respectively.

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