Futures fall as deadlock persists


Stocks are falling as the United States moves one day closer to default with little sign of progress in Washington.

S&P 500 futures are down more than half a percent but have been rebounding from their lows last night. European markets are also posting small losses, while Asian markets were mixed in the overnight session.

While deadlock began in the House, the acrimony spread to the Senate over the weekend as Democrats pushed to end spending cuts under so-called sequester rules. They also rejected a budget plan by Republican Susan Collins, who often allies with Democrats.

The impasse makes it more difficult for politicians to raise the U.S. debt limit with just four days until its borrowing capacity is reached. Government agencies also remain closed after the Senate and White House rejected budgets sent by the House earlier in the month.

The specter of default comes at a time of extremely bullish sentiment, with the economy improving and investors eager to put money into the stock market. The S&P 500 rallied sharply on Thursday and Friday on hopes of a deal in Washington, ending the week less than 2 percent below its all-time high from last month. Conclusive debt and budget deals would likely drive the index to new all-time highs.

Commodities and currencies are reflecting a modestly cautious tone. The safe-haven Japanese yen is inching higher, along with gold and silver. Oil is down almost 1 percent, though copper is up more than half a percent. The euro and Australian dollar are also posting small gains.

Economic news from overseas was also mixed: China reported a surprise drop in exports for September, but the Eurozone reported better-than-expected industrial production for August. There are no more items on the calendar for today, and most of this week's agenda will focus on corporate earnings.

Tomorrow's heavyweights include Citigroup, Intel, and Yahoo. (See related calendar story )

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ, Inc.

Copyright © 2010 OptionMonster® Holdings, Inc. All Rights Reserved.

This article appears in: Investing , Options

Referenced Stocks: SPX



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