Benchmarks ended sharply lower for the second day in a row as
investors awaited developments regarding the ongoing budget issue
and the debt ceiling deadline. President Barack Obama said he has
not received any serious proposals from Republicans which will
help both the parties to resolve their differences. The trade
balance report was not released yesterday due to a partial
government shutdown. Most of the sectors in the S&P 500
industry groups ended in the red led by consumer discretionary
and technology stocks. Nonetheless, the utilities sector managed
to finish in the green.
For a look at the issues currently facing the markets, make sure
to read today's
Ahead of Wall Street
The Dow Jones Industrial Average (DJI) declined 1.1% to close the
day at 14,776.53. The S&P 500 fell 1.2% to finish yesterday's
trading session at 1,655.45. The tech-laden Nasdaq Composite
Index dropped 2.0% to end at 3,694.83. The fear-gauge CBOE
Volatility Index (VIX) surged 4.8% to settle at 20.34.
Consolidated volumes on the New York Stock Exchange, American
Stock Exchange and Nasdaq were roughly 5.72 billion shares, lower
than 2013's average of 6.1 billion shares. Declining stocks
outnumbered the advancers. For 77% shares that declined, only 19%
Major indices have enjoyed a big rally this year and touched
multi-year highs. But lack of progress on the budget issue and
the upcoming debt ceiling deadline are pushing stocks lower in
recent days. The Dow and the S&P 500 have declined eleven
times in the previous fourteen trading sessions. As time passes,
investors are getting increasingly tense about the debt ceiling
CBOE Volatility Index, generally considered to be
"investor fear gauge," has jumped roughly 23% in October.
On Tuesday, President Barack Obama said to Republican Speaker of
the House of Representatives John Boehner that he is ready to
negotiate with Republicans if the partial government shutdown
ends and the threat of "economic chaos" is abolished.
President Obama further said: "So my suggestion to the Speaker
has been and will continue to be: 'Let's stop the excuses, let's
take a vote in the House, and let's end this shutdown right
now'...There are enough reasonable Democrats and Republicans in
the house who are willing to vote 'yes' on the budget that the
Senate had already passed."
It seems that there may be no relief for investors very soon. Two
Federal Reserve representatives said they wanted the central bank
to trim its stimulus program during their meeting in September.
Cleveland Fed President Sandra Pianalto said employment
conditions have been "substantial enough" since central bank
started its massive bond buying program in 2012 to back a
tapering. Philadelphia Fed president Charles Plosser said:
"Based on this outlook and the improvement in labor market
conditions, I believe it would be appropriate for the Fed to
begin to reduce the pace at which we are expanding our balance
sheet and to bring the purchase program to a close."
The consumer discretionary sector was the biggest loser among the
S&P 500 industry groups. The Consumer Discretionary SPDR
(XLY) lost 1.6%. Stocks such as Amazon.com, Inc. (NASDAQ:
), Comcast Corporation (NASDAQ:
), The Home Depot, Inc. (NYSE:
), The Walt Disney Company (NYSE:
) and McDonald's Corporation (NYSE:
) slipped 2.2%, 1.1%, 1.1%, 0.9% and 0.5%, respectively.
The utilities sector finished in the green and the Utilities SPDR
(XLU) gained 0.7%. Stocks such as Public Service Enterprise Group
), Exelon Corporation (NYSE:
), PG&E Corporation (NYSE:
), Consolidated Edison, Inc. (NYSE:
) and Edison International (NYSE:
) added 0.8%, 0.8%, 1.5%, 1.2% and 1.1%, respectively.
AMAZON.COM INC (AMZN): Free Stock Analysis
COMCAST CORP A (CMCSA): Free Stock Analysis
DISNEY WALT (DIS): Free Stock Analysis Report
CONSOL EDISON (ED): Free Stock Analysis
EDISON INTL (EIX): Free Stock Analysis Report
EXELON CORP (EXC): Free Stock Analysis Report
HOME DEPOT (HD): Free Stock Analysis Report
MCDONALDS CORP (MCD): Free Stock Analysis
PG&E CORP (PCG): Free Stock Analysis
PUBLIC SV ENTRP (PEG): Free Stock Analysis
To read this article on Zacks.com click here.