By RTT News, October 01, 2013, 08:57:00 AM EDT
(RTTNews.com) - After ending the previous session firmly in the red, stocks may move back to the upside in early trading on Tuesday. The major index futures are currently pointing to a higher open for the markets, with the Dow futures up by 28 points.
While worries about a possible government shutdown helped to drag stocks lower in recent sessions, traders seem to have shrugged off the news that a shutdown has actually taken place.
Republicans and Democrats were unable to reach a last minute agreement on a new temporary spending bill, resulting in a partial government shutdown at midnight.
The GOP-controlled House passed a bill that would have kept the government running but delayed the implementation of Obamacare.
However, the Democratic controlled Senate rejected the legislation, resulting in the first government shutdown in seventeen years.
Peter Boockvar, chief market analyst at the Lindsey Group, said the upward momentum for the markets despite the government shutdown reflects two things.
"1) The market believes the subsequent shutdown will be temporary and the eventual agreement will be wrapped up with a debt ceiling deal in the weeks to come and 2) the Fed won't be tapering any time soon with the now GDP risk (however moderate) from the partial close of the government," Boockvar said.
He added, "Assuming #1 happens, I repeat that #2 will continue to be the main thing the markets are focused on in addition to earnings in coming weeks."
On the economic front, the Institute for Supply Management is scheduled to release its report on national manufacturing activity in the month of September.
With worries about the looming government shutdown weighing on the markets, stocks moved notably lower during trading on Monday. The losses extended recent downward trends by the Dow and the S&P 500, which closed lower for the seventh time in eight sessions.
While the Nasdaq climbed well off its worst levels, the Dow and the S&P 500 remained firmly negative. The Nasdaq edged down 10.12 points or 0.3 percent to 3,771.48, while the Dow tumbled 128.50 points or 0.8 percent to 15,129.67 and the S&P 500 slid 10.20 points or 0.6 percent to 1,681.55.
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