Closing Bell: No Deal, No Joy, and the Markets Slide Again

Wall Street (Specialist Peter Elkins, left, and trader Edward McCarthy work on the floor of the New York Stock Exchange Wednesda
The stock market is closing at its lowest level in a month as the U.S. government enters a second week of being partially shut down. Investors fear the budget stalemate could prevent Congress from raising the government's borrowing limit by next week's deadline, bringing a threat of a debt default by the U.S.

The Dow Jones industrial average (^DJI) was down 136 points, or 0.9 percent, at 14,936. The Standard & Poor's 500 (^GPSC) index dropped 14 points, or 0.9 percent, to 1,676. The Nasdaq (^IXIC) composite fell 37 points, or 1 percent, to 3,770.

Two stocks fell for every one that rose on the New York Stock Exchange. Volume was much lighter than usual at 2.6 billion shares.

Senate Democrats moved to introduce legislation to raise the nation's debt limit without the unrelated conditions Republicans have said they are seeking, officials said. The White House signaled it would accept even a brief extension in borrowing authority to prevent an unprecedented default by the United States.

On Sunday, Speaker of the House John Boehner had ruled out a vote in the House of Representatives on a straightforward bill to increase the government's borrowing without concessions from President Barack Obama.

Lawmakers have until Oct. 17 to reach a deal on increasing the nation's debt ceiling. Failure to strike a deal could cause the United States to miss payments on its debt. The Treasury warned last week that a default could push the economy into a downturn even worse than the Great Recession.

Until now, the stock market has mostly moved sideways since the shutdown began at the start of the month, indicating that investors still expect lawmakers to come up with a deal. The S&P 500 is flat in October.

Some investors see the current stall in stock markets as a blip rather than a change in the long-term trend. The Federal Reserve continues to keep up its unprecedented stimulus of the economy, a strategy that has helped support a four-year surge in stocks.

The stock market climbed to record levels in September after the Fed said it would keep buying $85 billion of bonds a month to support the U.S. economy. Many investors had expected the central bank to start reducing its stimulus.

Minutes from the September meeting will be published Wednesday, giving investors an insight into the central bank's thinking.

Investors will also be keeping an eye on earnings reports this week. Companies start releasing financial results for the third quarter. S&P 500 companies are projected to report slowing earnings growth for the fourth straight quarter, according to data from S&P Capital IQ.

In commodities trading, the price of benchmark U.S. oil dropped 74 cents to $103.10 a barrel as crude production in the Gulf of Mexico got back on track after a storm system passed through. The price of gold rose $12.20 to $1,321.90 an ounce.

More Stocks in the News:
  • Cooper Tire & Rubber (CTB) slumped $3.76, or 12.7 percent, to $25.76 after the company filed a complaint in a Delaware court on Friday asking that the India company buying it quickly close on the deal. Investors are taking the news as a sign that the deal is in jeopardy.
  • Japan Airlines signed its first-ever purchase from Airbus, a deal for 31 A350 jets worth $9 billion at the planes' list price. The deal was a blow to Boeing (BA), which saw its stock lose 51 cents, or 0.4 percent, to $116.69.
  • Mattel (MAT) slipped $1.41 cents, or 3.3 percent, to $41.14 after a Goldman Sachs (GS) analyst cut his earnings estimates for the toy maker. The investment bank also cut its estimates for Hasbro (HAS), which fell 79 cents, or 1.7 percent, to $46.64. Goldman is predicting a tough holiday season for the toy makers as children favor video games.
  • Apple (AAPL) rose $4.91, or 1 percent, to $487.94 after a Jefferies analyst raised his rating and price target on the stock, saying improving margins should help the business until the launch of the iPhone 6.
  • Food recycling company Darling International (DAR) is buying a unit of Vion Holding NV for about 1.6 billion euros ($2.17 billion). Vion Ingredients, based in the Netherlands, produces specialty ingredients from animal origin for applications in pharmaceuticals, food, feed, pet food, fertilizer and bio-energy. Its brands include Rendac, Sonac, Ecoson, Rousselot, CTH and Best Hides. Darling gained 47 cents, or 2.3 percent, to $20.80 on the news.

What to Watch Tuesday:

  • Yum Brands (YUM) reports quarterly financial results after the market closes.
  • Alcoa (AA) reports quarterly financial results after the market closes.
Note: Many scheduled government reports have been postponed indefinitely because of the partial government shutdown.

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October 08 2013 at 9:30 AM Report abuse rate up rate down Reply

Now we know what the republican party are doing. It is time to send them home packing in the next election.

October 08 2013 at 5:58 AM Report abuse -1 rate up rate down Reply

Time to start shorting stocks. You can bet that congress members have their positions in order as they are immune to insider trading laws.
Oh that's right, sorry, you think it's health care.

October 08 2013 at 5:29 AM Report abuse rate up rate down Reply

80 members of our House of Representatives are demanding the right to dictate national legislative policy; that the House conform to their ideology; that our Senate bow to their ideology;that Barack Obama disavow Affordable Care, Barack Obama who was elected with his ACA over Mitt Romney who invented it but opposed it when he ran for President.

These 80 members are 18% of our House.

These 80 members are 33% of Republicans in our House.

These 80 members were elected with 12% of total votes electing Representatives.

These 80 members represent 18% of our population.

These 80 members represent districts that have become less diverse.

These 80 member represent districts that are 75% white to the average district that is 63% white. Mitt Romney won by an average 21 points in their districts to average districts where Barack Obama won by 4% more of total votes than Mitt.

Conservative commentator among conservative commentators, Charles Krauthammer, calls them "the suicide caucus."

In the shadow of our war in Iraq and our ongoing war in Afghanistan, wars in which our Congress expected and expects men and women across our nation to lay down their lives in questionable causes, the average members our House and Senate lack the moral and ethical courage to confront, call out, and disparage 80 members of our House who are defying national welfare and will no less brashly than did Southern governors defending racism in the 1960s.

October 08 2013 at 1:05 AM Report abuse -3 rate up rate down Reply

since we saved the scamming -thieving banks we are worse off---how about we try the other way ? let them all tumble......let the stock market crash to rubble.......its worth a shot

October 07 2013 at 11:58 PM Report abuse +1 rate up rate down Reply

While other countries improve their education, health care, child day care America is getting left behind.........

October 07 2013 at 10:14 PM Report abuse +1 rate up rate down Reply

Republicans like Cruze and Boehner are destroying America .

October 07 2013 at 9:52 PM Report abuse rate up rate down Reply
3 replies to eja5990's comment

2014 can't come soon enough fire the tea party they don't believe in government nor democracy..............

October 07 2013 at 9:49 PM Report abuse +1 rate up rate down Reply

Republicans are like Don Quixote .
They are fighting windmills on horses without legs .

October 07 2013 at 7:55 PM Report abuse -1 rate up rate down Reply
1 reply to chris1011's comment

NO they are fighting the Democrates,,,the killers of unborn babys....
Babys that have not had a chance in life.!!!

October 07 2013 at 8:20 PM Report abuse rate up rate down Reply

Got to love Boehner. The man runs on a platform that says that the Government is basically inept, inefficient, unintelligent, and corrupt and then goes on to prove it, by example.

October 07 2013 at 7:51 PM Report abuse rate up rate down Reply