Thursday, October 03 17:17:30
U.S. stocks fell today as a partial U.S. government shutdown entered its third day, with investors growing concerned that the budget stalemate will become intertwined with a coming deadline to raise the debt limit.
Weaker-than-expected growth in the U.S. service sector also added to the negative tone. The government closure has had a limited effect on markets thus far, but the impact is gathering a bit of strength as concerns over raising the U.S. borrowing authority have risen.
The three major indexes fell more than 1 percent.
The situation in Washington has pressured equities, with the S and P 500 having dropped in nine of the past 11 sessions. All 10 S and P sectors fell, with industrial names among the hardest hit. Boeing Co fell 2.5 percent to $115.33.
President Barack Obama met with Republican and Democratic leaders in Congress late Wednesday to try to break the budget deadlock, but no breakthrough seems to be in sight. Markets took a turn for the worse after Obama, in a speech, reiterated that he would not meet Republican demands in exchange for operating the government.
The Treasury has said the United States will exhaust its borrowing authority no later than Oct. 17. If no deal is reached on raising the debt ceiling, the United States could default on its debt.
"What's happened in Washington? Nothing. When people are uncertain about what's going to happen, they sell first and ask questions later," said Michael James, managing director of equity trading at Wedbush Securities in Los Angeles.
"I think the feeling on Tuesday was, 'OK the government's shut down, but they're going to do something in a day or two.' Now we're in day three, and people are getting both a little concerned and annoyed."
The Dow Jones industrial average was down 182.12 points, or 1.20 percent, at 14,951.02. The Standard and Poor's 500 Index was down 22.87 points, or 1.35 percent, at 1,671.00. The Nasdaq Composite Index was down 60.13 points, or 1.58 percent, at 3,754.89 (Reuters)