Stocks pare losses after rough start in day two of shutdown

Adam Jeffery | CNBC

There were two major problems going into the open today.

First, a poor September ADP private sector jobs report, with August numbers revised downward.

Second, talk overnight that a shutdown could last two weeks, going right up to the deadline on the debt ceiling.

The latter is definitely NOT priced into the market.

Stocks began to lift in the late morning when it was announced that the president would be meeting with congressional leaders. Senate Majority Leader Harry Reid then sent a letter to House Speaker John Boehner proposing that if a joint resolution is passed for some unspecified period to allow the government to reopen, he would name conferees to a budget conference.

Budget cuts are something everyone can come together and make a deal on. The hope today is that there will be concessions on deficit reduction, but that Obamacare will continue and not be defunded.

Of course, all this could go horribly wrong very quickly. My friend Greg Valliere noted this morning that all sorts of proposals could be dredged up in any budget negotiations, including the Keystone pipeline, tax reform, curbs on federal pensions and, of course, entitlements.

By CNBC's Bob Pisani