By Dow Jones Business News, October 07, 2013, 08:23:00 AM EDT
--Stock futures drop as the government shutdown enters its second week with no end in sight
--Investors growing worried that the stalemate could continue past debt-ceiling deadline
--European, Asian markets fall on back of U.S. weakness
By Tomi Kilgore
NEW YORK--U.S. stock futures slumped as the government shutdown entered its second week, with investors growing
increasingly worried that the stalemate in Washington could continue past the deadline to raise the debt ceiling.
About 90 minutes ahead of the open, Dow Jones Industrial Average futures dropped 124 points, or 0.8%, to 14874. On
Friday, the Dow rose 76 points, or 0.5%, but suffered a second-straight weekly loss.
S&P 500 index futures shed 15 points, or 0.9%, to 1670 and Nasdaq 100 futures lost 25 points, or 0.8%, to 3210.
Changes in stock futures don't always accurately predict stock moves after the opening bell.
Rather than move closer to a deal over the weekend, as investors hoped on Friday, the two parties appeared to become
even more divided, with Republican leaders increasingly tying the fight to a deadline to avoid a default on U.S. debt.
On Sunday, House Speaker John Boehner said he wouldn't move with legislation to reopen the government unless Democrats
agree to broader talks to trim the deficit. He said he could garner enough votes from party members to pass any bills to
open the government or raise the debt ceiling without concessions.
Chris Hobart, chief executive of financial advisory firm Hobart Financial, which manages around $300 million, said the
continued bickering in Congress is starting to affect the confidence of Main Street investors. "We are hearing a lot
more people calling in nervous and asking questions about what they should do," Mr. Hobart said. "The fear is starting
to build up."
Some investors have already moved to a more defensive posture as a result.
He said the focus will remain on the government this week, even with the beginning of earnings reporting season set to
start Tuesday. "Even if we have some positive earnings, the fact that there is still a stalemate, and with the debt
ceiling looming," should keep investors on edge.
That said, he believes the current volatility is creating a "buying opportunity."
"We've dealt government shutdowns in the past, and come through them many times," Mr. Hobart added. "Typically, the
market will respond positively when this is resolved."
The economic calendar is mostly bare, with just consumer credit for August, due out at 3 p.m. EDT, expected to rise by
The yield on the 10-year Treasury note slipped to 2.621% from 2.65% late Friday.
Front month November crude-oil futures fell 0.9% to $102.86 a barrel, weighed by worries about the shutdown and as
Tropical Store Karen receded. Meanwhile, October gold futures tacked on 0.2% to $1,311.80 an ounce. The dollar lost
ground against both the yen and the euro.
European markets were broadly lower, with the Stoxx Europe 600 down 0.7% to a one-month lower amid worries over the
U.S. debt talks.
Asian markets also fell, with Japan's Nikkei Stock Average shedding 1.2% after falling 5% last week. China's Shanghai
Composite remained closed for a weeklong holiday.
In corporate news, Alcoa declined 1.4% in premarket trading. The aluminum company will unofficially kick off third-
quarter earnings reporting season when it reveals results after Tuesday's close. The company beat earnings estimate the
last two quarters.
Dow component Boeing shed 1% after Airbus won a order worth more than $9 billion from Japan Airlines, which had
previously exclusively ordered jetliners from Boeing.
Blackberry rose 5.9% in active trading after reports surfaced that several technology companies are looking at the
troubled smartphone maker for a potential takeover.
Write to Tomi Kilgore at firstname.lastname@example.org
(END) Dow Jones Newswires
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