(Updates with closing prices)

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Indexes: Dow up 0.16%, S&P 500 up 0.13%, Nasdaq off 0.21%

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Democrats propose a deal to end shutdown

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Tesla shareholders approve $1 trillion CEO pay package

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Microchip Technology ( MCHP ) falls following its disappointing

sales

forecast

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Expedia ( EXPE ) jumps after annual revenue growth forecast hike

By Stephen Culp

NEW YORK, Nov 7 (Reuters) - The Nasdaq closed lower but

the S&P 500 and the Dow eked out late-session gains on Friday as

investors turned the page on a roller-coaster week with economic

worries, the longest-ever federal government shutdown, and

sky-high tech stock valuations dampening risk appetite.

All three major U.S. stock indexes spent much of the session

sharply lower, but losses shrank, with the S&P 500 and the Dow

turning higher late in the day following reports of progress on

the congressional impasse which has resulted in the longest

federal government shutdown in U.S. history.

"A resolution to the shutdown will clearly improve

sentiment, particularly at a time when the margin of error is

narrow," said Terry Sandven, chief equity strategist at U.S.

Bank Wealth Management in Minneapolis. "Stocks are at all-time

highs and valuations are elevated, and if the shutdown gets

resolved, it's one less thing weighing on the minds of

investors."

All three indexes lost ground from last Friday's close, with

the Nasdaq registering its largest weekly percentage drop since

late March/early April amid mounting concerns over inflated

valuations of artificial intelligence-related momentum stocks,

which have provided much of the upside muscle to the stock

market's rally over recent months.

"Ups and downs and periods of consolidation are part of the

normal ebb and flow of a bull market," Sandven added.

Concerns arising from the government shutdown were apparent

in the University of Michigan's preliminary take on November

Consumer Sentiment, which fell to its lowest level in over three

years. Survey participants' assessment of current conditions

plunged to its most pessimistic reading in the survey's history.

Overall sentiment has slid 29.9% since November 2024, when U.S.

President Donald Trump was elected to his second term in the

Oval Office.

The shutdown has also led to a blackout of official economic

indicators, complicating the Federal Reserve's dual mandate of

promoting full employment and price stability.

"Flying in the dark in the absence of economic data due to

the shutdown is weighing on investors as well, adding a layer of

uncertainty," said Ryan Detrick, chief market strategist at

Carson Group in Omaha. "We know earnings were strong, but the

housing market is weak."

"Clearly the labor market is weakening and investors are

taking a 'sell first, ask questions later' mentality so far in

November."

On the trade front, Beijing has begun creating a new rare

earth licensing program that could speed up shipments but is

likely to fall short of Washington's hopes for a complete

rollback of restrictions.

The Dow Jones Industrial Average rose 74.80 points,

or 0.16%, to 46,987.10, the S&P 500 gained 8.48 points,

or 0.13%, to 6,728.80 and the Nasdaq Composite

lost 49.45 points, or 0.21%, to 23,004.54.

Third-quarter reporting season continued to barrel toward

its conclusion, with 446 of the companies in the S&P 500 having

reported. Of those, 83% have delivered better-than-expected

earnings, according to LSEG data.

Analysts now predict year-on-year S&P 500 earnings growth of

16.8% for the July-September period, a significant improvement

over the 8.0% annual growth.

Microchip Technology ( MCHP ) shares dropped 5.2% after

forecasting quarterly net sales below estimates.

Tesla shareholders approved the largest corporate pay

package in history for CEO Elon Musk. The electric vehicle

maker's shares fell 3.7%.

Shares of Expedia ( EXPE ) surged 17.6% after the travel

platform reported solid bookings from its business-to-business

segment.

Block slumped 7.7% after missing third-quarter

profit expectations, and Take-Two Interactive fell 8.1%

following the company's decision to delay the launch of its

popular video game Grand Theft Auto VI to November 2026.

Advancing issues outnumbered decliners by a 1.44-to-1 ratio

on the NYSE. There were 97 new highs and 195 new lows on the

NYSE.

On the Nasdaq, 2,422 stocks rose and 2,201 fell as advancing

issues outnumbered decliners by a 1.1-to-1 ratio.

The S&P 500 posted 14 new 52-week highs and 14 new lows

while the Nasdaq Composite recorded 43 new highs and 323 new

lows.

Volume on U.S. exchanges was 20.15 billion shares, compared

with the 20.77 billion average for the full session over the

last 20 trading days.