NEW YORK (REUTERS) - The S&P 500 closed at a record high on Thursday as investor confidence grew following a last-minute deal to avoid a United States (US) default, but weaker-than-expected results from heavyweights IBM and Goldman Sachs pressured the Dow.
The S&P 500's intraday record of 1732.92 broke the all-time high set Sept 19. Over 80 per cent of stocks traded on the New York Stock Exchange rose. Technology was the only S&P sector to show a loss as IBM led the decline.
IBM shares hit a two-year low a day after reporting weaker-than-expected revenue and subtracted 76 points from the Dow industrial average. IBM also was the biggest decliner on the S&P 500, ending down 6.4 per cent at $174.78.
Congress approved an 11th-hour deal on Wednesday to end a partial government shutdown and increase US borrowing authority, pulling the US back from a possible default on its debt.
The political wrangling has led some investors to believe the US Federal Reserve will have no choice but to leave its fiscal stimulus measures in place for several more months. That could keep stocks rising through the rest of the year.
"The scare that was created by the lengthy delay in resolving the (fiscal) issue has created a situation that has taken Fed tapering off the table for a considerable period here," said Mr Stephen Massocca, managing director at Wedbush Equity Management in San Francisco.
"That is why we saw buying over the last week and that is why we will see continued buying for a few more days."
The CBOE Volatility Index, a measure of investor anxiety, fell to 13.43, the lowest since Sept 20, the week before the government shutdown began.
Investors had worried that an extended shutdown would weigh on economic growth and corporate outlooks. A Reuters survey showed economists have grown less optimistic about prospects for the economy as the fight over fiscal policy took its toll.
The Dow Jones industrial average was down 3.98 points, or 0.03 per cent, at 15,369.85. The Standard & Poor's 500 Index rose 11.36 points, or 0.66 per cent, at 1,732.90.
The Nasdaq Composite Index was up 23.72 points, or 0.62 per cent, at 3,863.15.
Trading volume was relatively light at 5.3 billion total shares.
Goldman Sachs shares fell 2.4 per cent to $158.32 after the fifth-largest US bank by assets said third-quarter revenue plunged 20 per cent, hurt by weak mortgage and bond-trading results.
So far, 54.4 per cent of companies in the S&P 500 have beaten Wall Street revenue estimates, down from the 61 percent average since 2002 but above the 49 per cent average for the past four quarters.
EBay Inc dropped 3.9 per cent to $51.38 and was the biggest drag on the Nasdaq 100 index after the company gave a disappointing holiday forecast a day earlier, saying the US economy had deteriorated partly because of the government shutdown.
Among gainers, shares of Verizon Communications Inc, the largest US mobile operator, rose 3.5 per cent to $48.90 after the company posted stronger-than-expected third-quarter earnings and revenue.
The number of Americans filing new claims for unemployment benefits dropped from a six-month high last week but remained elevated as California continued to deal with a backlog related to computer problems.
The pace of manufacturing growth in the US mid-Atlantic region slowed slightly in October, but firms' optimism about the future hit a 10-year high, the Philadelphia Federal Reserve Bank said.