U.S. Stock Futures Rise Despite Shutdown; Cars in Focus
By Barbara Kollmeyer
U.S. stock futures pointed to gains at the open for Wall Street on Tuesday as investors, at least for the moment,
chose to shrug off a partial government shutdown that kicked in as a deadline passed without a deal.
Data on tap includes a fresh look at the U.S. manufacturing industry and sales figures from car makers.
In a marked difference to sharp losses seen in Monday's premarket session, futures for the Dow industrials rose 54
points, or 0.4%, to 15100. Futures for the Standard & Poor's 500 index gained 7.6 points, or 0.5%, to 1681.90. Futures
for the Nasdaq 100 index rose 13.75 points, or 0.4%, to 3222.75.
U.S. politicians failed at the 11th hour to agree on funding for the fiscal year that began just after midnight, owing
to moves by lawmakers over the budget and President Barack Obama's health-care law. A shutdown--the first in 17 years--
has begun, furloughing thousands of government workers in the process.
Given the increased uncertainty created by the budget impasse, and with the government needing to raise the debt
ceiling by Oct. 17, there are higher risks of a further correction in stock markets, said Allen von Mehren, chief
analyst at Dankse Bank in a note.
"The reaction so far has been fairly muted. But given that markets have been technically overbought, we think it's
likely we will see further declines in coming weeks," said Mr. von Mehren. "This should also add to downside pressure on
bond yields. In the short term, the risk is also that the U.S. dollar could weaken further."
The shutdown means the week's biggest piece of economic data, September's monthly jobs report, won't be released on
Friday. However, markets are bracing for the possibility that the data could be released as early as Tuesday.
Economists polled by MarketWatch expect payrolls to rise to 185,000 in September from 169,000 in August.
On the regular schedule, the Institute for Supply Management's business survey is projected to drop to 55% in
September from a more than two-year high of 55.7% in August. A number above 50% signals growth. The report will be
released at 10 a.m. EDT.
Ahead of that, the Markit PMI, will come out shortly before 9 a.m. EDT. The preliminary Markit PMI totaled 52.8 in for
A report on construction spending for August will be postponed due to the shutdown.
On the corporate front General Motors Co. (GM) and Ford Motor Co. (F) could be active as major car makers are
scheduled to release monthly auto sales data. Analysts are predicting car sales could fall in September versus the year-
Across other markets, the dollar was under pressure, while oil prices also fell and gold moved higher.
Asia stocks showed little reaction to the looming shutdown, with Japanese shares eking out a small gain after Prime
Minister Shinzo Abe said he would raise the country's sales tax next year. Europe stocks logged gains, with data showing
the euro-zone manufacturing sector expanded for a third month in September. The final reading came in unchanged from a
Wall Street stocks dropped Monday, with the Dow industrials logging a triple-digit decline as the deadline for a
budget deal neared.
Write to Barbara Kollmeyer at firstname.lastname@example.org
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