Sep. 26 - Summary: Stocks rally for the first time in six sessions thanks to a drop in weekly jobless claims; J.C. Penney changes mind about needing extra cash; Republicans stand firm as shutdown looms; Jamie Dimon does face-to-face with DOJ. Conway G. Gittens reports.
Wall Street marks time with a small gain as worries about Washington cap any optimism on the economy. The Dow and S&P 500 did manage to snap five-day losing streaks and the Nasdaq was higher as well. Republican House leader John Boehner doesn't seem willing to give in to White House demands for a speedy resolution to prevent a government shutdown on October 1st. That cast a shadow on economic data: The number of Americans seeking first-time unemployment benefits dropped to a near six-year low. And economic growth in the second quarter surprisingly held steady at the previously stated pace of 2-1/2 percent, despite all the noise about government spending cuts and higher interest rates. On the downside, signed contracts for purchases of previously-owned homes fade for a third consecutive month, in a reading that worse than predicted. No. we don't need it! Well, maybe we do. After saying it had enough cash to make it through the holidays, J.C. Penney changes its mind - offering 8.4 million shares. A day earlier, sources said the struggling retailer was looking to raise up to a billion dollars in pre-holiday cash, which J.C. Penney basically denied. Expect shares of JCP to trade lower on Friday. Mr. Dimon goes to Washington. In a bid to polish up a tarnished image, JPMorgan Chase CEO Jamie Dimon met with the U.S. attorney general. His bank, according to sources, could be forced to pony up $11 billion to settle various charges - many stemming from the financial crisis. Meantime, The U.S. Justice Department unveiled a long-running prix-fixing scandal in the auto parts business. Nine auto parts suppliers based in Japan and two executives have agreed to plead guilty and pay $740 million in fines. U.S. Attorney General Eric Holder: SOUNDBITE: U.S. ATTORNEY GENERAL ERIC HOLDER (ENGLISH) SAYING: "As a result of these conspiracies, Americans paid more for their cars and American companies such as Chrysler, Ford, General Motors as well as U.S. subsidiaries of Honda, Mazda, Mitsubishi, Nissan, Subaru and Toyota were victims of these illegal cartels." European stocks were split with some investors fixated on Italy's political circus, with others focused on Britain's strongest growth in three years.