Market Insider

Bulls party on, but market could see post-DC hangover

Adam Jeffery | CNBC

Wall Street's bulls may be partying hard on the prospect of a Washington debt deal, but the actual vote is likely to trigger a "sell the news" letdown.

Stocks rallied Wednesday after reports that Congress would fast track a compromise bill expected from the Senate, and that House Speaker John Boehner would shepherd the bill through the House with the help of Democrats.

The Dow rocketed to 15,373, a 1.4 percent or 205-point gain Wednesday, a more than 650 point increase from its low of 14,719 just a week ago. The was up 1.4 percent, and the Nasdaq gained 1.2 percent to 3839.

"If there's a deal tonight, I think you're going to get a little bit of selling on the news. You've got the realization that the earnings season thus far has been ignored and is lackluster," said Art Hogan of Lazard Capital Markets. "We're going to get the 'all clear' signal from Washington, but we're not going to get the 'all clear' signal from corporate America."

With the reopening of the government, the market will also get a better look at how the economy is performing since important economic data will again be available.