Wall Street Falls As No Progress Seen To Resolve Shutdown

Traders work on the floor of the New York Stock Exchange, October 7, 2013. REUTERS/Brendan McDermid

Traders work on the floor of the New York Stock Exchange, October 7, 2013. REUTERS/Brendan McDermid


NEW YORK  - U.S. stocks fell on Monday, extending two weeks of losses, as a lack of progress in ending the partial U.S. government shutdown or the debt-ceiling standoff kept investors nervous.

The S&P 500 ended near its lows of the session in a volatile day and dropped for its 10th time in the past 13 sessions. The CBOE Volatility index .VIX, a measure of investor anxiety, jumped 16 percent to its highest level since June. The VIX has gained for three weeks, up 48 percent over that period.

Much of the government has been closed since the start of the month, resulting in up to a million workers being furloughed. Investors are also looking ahead to the upcoming debate over the debt ceiling, which could result in a default on U.S. debt if not resolved.

In weekend comments, neither Republicans nor Democrats offered any sign of progress and both blamed the other side for the impasse. The deadline to increase the ceiling is October 17.

"The market is vulnerable to further declines for as long as the situation remains unclear. With each passing day, the market becomes more restless," said Leo Grohowski, chief investment officer at BNY Mellon Wealth Management in New York.

Grohowski, who helps oversee $175 billion in client assets, estimated that each week the shutdown continues could shave 10 to 15 basis points off gross domestic product.

"While that isn't a lot, the recovery is still too fragile to withstand any long-term impact. It will start to have an impact on earnings estimates, which will impact valuations," he said.

Nine of the S&P's 10 sectors were lower on the day, with groups tied to the pace of economic growth, including financials .SPSY and materials .SPSMCM, among the weakest of the day. The only sector that rose was telecom .SPLRCL, which is considered a defensive play.

About 70 percent of Nasdaq-listed shares closed lower while more than three-fourths of stocks traded on the New York Stock Exchange ended down.

Among the biggest losers in the financial sector, Capital One Financial (COF.N) lost 2 percent to $68.88 while American Express Co (AXP.N) lost 1.8 percent to $72.94.

The Dow Jones industrial average .DJI was down 136.34 points, or 0.90 percent, at 14,936.24. The Standard & Poor's 500 Index .SPX was down 14.38 points, or 0.85 percent, at 1,676.12. The Nasdaq Composite Index .IXIC was down 37.38 points, or 0.98 percent, at 3,770.38.

The S&P has fallen for two weeks and is down nearly 3 percent from its all-time closing high on concerns about Washington dysfunction. The benchmark index closed below its 50-day moving average, a sign that near-term momentum may be to the downside.

U.S.-listed shares of BlackBerry (BBRY.O) rose 3.6 percent to $7.97 after sources close to the matter said it is in talks with Cisco Systems (CSCO.O), Google Inc (GOOG.O) and Germany's SAP (SAPG.DE) about selling all or part of the company.

Apple Inc (AAPL.O) rose 1 percent to $487.75 after Jefferies & Co upgraded the stock, citing expected margin improvement.

Atossa Genetics Inc (ATOS.O) slumped 46 percent to $2.85 after the company said it would recall a medical device used to collect breast fluid for cancer detection along with a test that uses it.

With the ongoing stalemate in Washington, trade data on Tuesday and retail sales on Friday are among important economic reports that will not be released if the shutdown continues. Last week, non-farm payrolls, construction spending, and factory orders data were not released.

Volume was light, with about 4.54 billion shares changing hands on the New York Stock Exchange, the Nasdaq and NYSE MKT, below the daily average so far this year of about 6.1 billion shares.

By Ryan Vlastelica | Mon Oct 7, 2013 4:25pm EDT (Reuters)

(Editing by Kenneth Barry and Nick Zieminski)


News Sources

  • ABC
  • Access Hollywood
  • Associated Press
  • BBC
  • Bloomberg
  • Boston Globe
  • C-SPAN
  • CBS
  • Chicago Sun-Times
  • Christian Science Monitor
  • Center for Public Integrity
  • CNN
  • Congressional Quarterly
  • Democracy Now!
  • Digg
  • E! Online
  • Entertainment Weekly
  • Financial Times
  • Forbes
  • Foreign Policy
  • Fortune
  • Front Street Magazine

  • U.S. News, World News
  • Business, Politics
  • Entertainment, Sports
  • Art, Lifestyle
  • Videos And More
  • News Sources

  • Fox News
  • Google News
  • Guardian
  • Huffington Post
  • Independent
  • LA Weekly
  • Los Angeles Times
  • McClatchy
  • Mother Jones
  • National Journal
  • NBC New
  • New York Post
  • New York Times
  • Newsweek
  • Newsy
  • NPR
  • PBS NewsHour
  • People
  • Politico
  • Reuters
  • TPM
  • Washington Post
  • Thanks For Your Support!


    Copyright © 2021 Front Street. All Rights Reserved.

    Skip to toolbar