What if Investors $680 Billion

Aug. 1, 2011 - PRLog -- "A grand bargain is just the ticket to power stocks," Howard Ward, who helps oversee $35 billion in Rye, New York, for Mario Gabelli's Gamco Investors Inc., said in an e-mail on July 26. "With the Fed on hold, Greece off the table and a bipartisan debt deal in Washington, stocks would be the only game in town."Agreement Reached

The S&P 500 fell 1.2 percent to 1,276.56 at 12:01 p.m. in New York today as slower-than-forecast growth in U.S. manufacturing offset Obama's announcement that leaders of both parties in the House and Senate approved a deal to raise the debt ceiling and cut the federal deficit.

President Barack Obama's dispute with Congress cost U.S. stockholders $680 billion last week. It may be a clash investors end up embracing, based on more than a century of market history.The Dow Jones Industrial Average has posted average gains of 12 percent in years before presidential elections since its creation in 1896 and advanced the last 17 times, according to data compiled by Bloomberg and Dow Jones. The 30-company gauge has risen 4.9 percent in 2011, its third-smallest increase at this point of an administration's third year since the streak of gains began in 1941. It needs to climb another 7.2 percent through the end of the year to match the historical mean.

The S&P 500 declined to the lowest level since June after the Commerce Department said July 29 that the U.S. economy grew less than forecast in the second quarter. Gross domestic product climbed at a 1.3 percent annual rate following a 0.4 percent gain in the prior quarter that was slower than earlier reported.

Candidates seeking re-election typically cut taxes and support measures that boost equities. While the Standard & Poor's 500 Index fell every day last week on concern the U.S. will default, the combination of Obama's appeal for a bipartisan solution, rising corporate profits and European efforts to prevent the euro from unraveling may prove to be bullish signs as  www.featherhairextensionsus.com/peacock-feather-hair-c-3.html.

The stock index dropped for a third month in July, its longest slump since 2008, as the U.S. Treasury prepared plans for paying the government's obligations should Congress fail to raise the borrowing limit. The government will run out of options to prevent a default unless the $14.3 trillion ceiling is increased by tomorrow, Treasury Secretary Timothy F. Geithner has said.

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