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Daily Scan: Stocks rise Wednesday but suffer worst quarter in four years; Government avoids shutdown

By NexChange
Capital Markets

Updated throughout the day 

September 30

Good afternoon.  U.S. stock markets rose Wednesday, but notch the worst quarter in four years, with the Dow Jones Industrial Average tumbling 7.6%. The Dow gained 1.5% on Wednesday, the S&P 500 added 1.9%, and the Nasdaq added 2.3% after Chinese consumers registered a surprising amount of confidence in the economy. The Westpac MNI China Consumer Sentiment Indicator rose to 118.2 in September from 116.5 in August -- the best reading since May 2014. European markets rose about 2% on the report, shrugging off news that deflation was back as prices dropped 0.1%, largely the result of cheaper oil. Oil continues to hover just over $45/barrel.  On the schedule today:  at 7 p.m. Fed governor Lael Brainard will also address the St. Louis community banking conference. The economic fodder of the week: the jobs report for September, to be published Friday at 8:30 a.m. ET.

Here's what else you need to know:

Shutdown averted. The U.S. Senate approved a temporary spending measure, averting a government shutdown. The government will continue operating through Dec. 11 as Congress continues to debate funding policies. New York Times

Janet Yellen says little during Wednesday speech. At a meeting for the Conference of State Bank Supervisors, Yellen refrained from commenting on the U.S. economy or monetary policy. Instead, she said small banks are "essential" to the economy and the Fed is working to not overburden community banks. Reuters

U.N. raises Palestinian flag for the first time. At the ceremony in New York, President of the Palestinian Authority Mahmoud Abbas  repudiated the Oslo Accord, signed in 1993, saying Israel had violated the accords. Israeli Prime Minister Benjamin Netanyahu called Abbas' remarks "deceitful." In 2012 Palestine joined the Vatican with "non -member observer" status at the U.N. CNN

M&T Bank acquisition approved. The Federal Reserve approved M&T's acquisition of Hudson City Bancorp after more than three years of regulatory review. The $3.7 billion deal is the longest-delayed U.S. bank deal of more than $100 million. Wall Street Journal (paywall)

The MSCI Asia ex-Japan Index collapsed 19% in 3Q. China notched its worst quarter since 2008, losing roughly 29% since the start of July. Currencies also got slammed. Malaysia's ringgit tumbled 14% in the quarter and is off 26% year-to-date. The one bright spot: China's auto industry, which surged after the government halved sales taxes on small-engine cars. MarketWatch 

Volkswagen may evade criminal charges. VW has admitted to tampering with emissions tests to pass tough regulations for 11 million vehicles. The German carmaker may benefit from a legal loophole but the Justice Department is trying to figure

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