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Stocks soared today as Congress finally came to an agreement to reopen the government and raise the debt ceiling, which was set to be breached tomorrow. All major indexes jumped more than 1%, with the Dow Jones Industrial Average (DJINDICES:^DJI) climbing 206 points, or 1.4%, to finish at 15,373 points, just 300 points off its all-time closing high. While the government shutdown resulted in volatile trading in the market over the last few weeks, investors, for now at least, seem to have emerged unscathed.
Final passage of the bill is expected late tonight or early tomorrow morning. Investors and others affected by the shutdown may now breathe a sigh of relief, but the deal does nothing to solve the long-term disagreements plaguing Congress, and sets up three important deadlines over the next few months, any of which could trigger another crisis. The agreement stipulates that House and Senate negotiators must work out long-term guidelines for tax and spending policies by December 13, and it funds the government through January 15. Finally, it raises the debt ceiling until February 7.
Students of recent financial and political history are well aware that each of these individual crises is just an episode in a larger passion play. It began with the standoff over the debt ceiling in 2011, when Republicans refused to raise the borrowing limit without spending cuts attached. That event led to the sequestration agreement, which caused the "fiscal cliff" at the end of 2012. The current government standoff is just the latest iteration of the same congressional tantrum. Oddly enough, there is no actual debt crisis as our ability to borrow is not in jeopardy, and an improving economy has reduced the deficit faster than expected. All of these crises are simply the result of political machinations and grandstanding.
Among stocks making news today, eBay (NASDAQ:EBAY) shares were off nearly 5% after hours as the online auction house disappointed the market with a weak outlook for the holiday quarter. Revenue in its third quarter hit $3.89 billion, barely below estimates of $5.9 billion, while adjusted per-share profits beat estimates by a penny. Growth in PayPal usage helped drive the profit increase, but eBay said full-year guidance would come in at the low end of its previously stated range due to cautious expectations for the U.S. holiday season. For the fourth quarter, it expects revenue of $4.5 billion-$4.6 billion and adjusted EPS of $0.79-$0.81, lower than the analyst consensus of $4.64 billion in sales and an EPS of $0.83.
Fool contributor Jeremy Bowman has no position in any stocks mentioned. The Motley Fool recommends and owns shares of eBay. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.