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Stocks rise on hope government shutdown will end

Stocks posted modest gains Friday, driven by budding optimism among traders that Washington's bickering politicians can reach an agreement on the budget and on increasing the government's borrowing limit soon.

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Traders work on the floor of the New York Stock Exchange Friday. Stocks rose on optimism over an end to the government shutdown in Washington.

Brendan McDermid/Reuters

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Wall Street thinks Washington's gridlock could be easing.

Stocks posted modest gains Friday, driven by budding optimism among traders that Washington's bickering politicians can reach an agreement on the budget and on increasing the government's borrowing limit soon.

"Call it 'modest optimism,'" said Frank Davis, director of sales and trading at LEK Securities.

The stock market rose for just the third time in 12 days. The Dow Jones industrial average closed up 76.10 points, or 0.5 percent, at 15,072.58. The Standard & Poor's 500 index rose 11.84 points, or 0.7 percent, at 1,690.50 and the Nasdaq composite index gained 33.41 points, or 0.9 percent, at 3,807.75.

Traders aren't expecting a miracle. The rhetoric between Democrats and Republicans remains as hot as ever. But the pressure to end the shutdown and raise the debt ceiling is climbing quickly.

"The thought is that the Republicans and Democrats will soon work this out before Oct. 17," Davis said, referring to the date the Treasury Department said the government's borrowing authority would be exhausted.

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