- Market commentary on upcoming Twitter IPO considerable
- Labour Dept. Needs 3 days to release non-farm payrolls
Dow Jones Industrials: -0.53%
Nasdaq Composite: -0.39%
S&P 500: -0.44%
US stock benchmarks were bouncing off their lows of the day as the government entered its second week of a shutdown after failing to agree on passing a budget bill and raising the nation's debt limit.
Lawmakers have continued to butt heads over the budget, with Republicans urging President Barack Obama to change his controversial healthcare bill and Democrats refusing to budge.
"The US government shutdown has already extended to four working days and there is a rising risk that it could last for two weeks or more," economists at ABN Amro wrote this morning.
The government went into deadlock after missing the budget deadline last Monday and now has until October 17th before reaching its $16.7trn borrowing limit.
US House Speaker John Boehner has ruled out increasing the debt ceiling without setting preconditions, prompting fears of a possible default.
"If that scenario was to play out, we are potentially looking at credit rating downgrades galore for the US, a huge flight out of US assets [dollar, equities, bonds] and holders of large amounts of US debt [such as China] taking a massive hit," according to Ishaq Siddiqi, Market Strategist at ETX Capital.
"On top of that, US economic recovery at the risk of being derailed; 800,000 federal workers still on unpaid leave and a huge number more expected if an agreement by lawmakers is not reached; businesses also stand to take a significant hit," Siddiqi went on to explain.
With the release of most economic data on hold due to the government shutdown, investors will turn to company news.
IBM takes it on the chin
dragged after Reuters reported that the tech giant, along with SAP and Cisco Systems, held talks to buy all or part of Blackberry.
Wal-Mart Stores Inc. advanced after the Chief Executive of its Asia division, Scott Price, said the company has transformed its practices and legal compliance in the region and is considering acquisitions in China.
IBM declined after Barclays downgraded its rating on the shares to 'equal weight' from 'overweight'.
Cooper Tire & Rubber Co. fell following reports Apollo Tyres wants to cut its 42.5bn offer to buy the company after US and Chinese workers challenged the takeover.
Toll Brothers slumped after Goldman Sachs reduced its recommendation on the US luxury-home builder to 'neutral' from 'buy'.
The US earnings season will kick-off tomorrow with Alcoa, the country's biggest aluminum producer, after the close of trading.
Twitter is the object of a fair bit of coverage in today´s financial press, with columnist Jeff Reeves over at Marketwatch.com, giving it a very favourable review.
The worst performing industrial groups at the moment are: Tires (-3.96%), Toys (-1.58%) and recreational products (-1.54%).
Crude slips lower
Ten-year US yields were down three basis points to 2.62%.
West Texas Intermediate crude futures dropped 1.31% to $102.50 per barrel on the NYMEX.