U.S. Stock Futures Fall on Stalemate
U.S. stock futures slumped as the government shutdown entered its second week, with investors growing increasingly worried the stalemate could stretch past the deadline to raise the limit on federal borrowing. 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 limit on federal borrowing.The Morning MoneyBeat
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. Republican leaders increasingly tied the fight to a deadline to raise the borrowing limit and avoid a potential 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.
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.
The focus will remain on the government this week, Mr. Hobart said, even with earnings reporting season set to start on 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 [with] 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. Figures on consumer credit for August are due out at 3 p.m. EDT; economists expect the total to rise by $13.5 billion.
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 down by worries about the shutdown and as Tropical Storm 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. The Stoxx Europe 600 was down 0.7% to a one-month lower amid worries over the U.S. debt talks.
Asian markets also fell. Japan's Nikkei Stock Average shed 1.2% after falling 5% last week. China's Shanghai Composite remained closed for a weeklong holiday.
In corporate news, Alcoa AA +1.26% declined 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 BA +1.67% slid after Airbus won a order worth more than $9 billion from Japan Airlines, 9201.TO +3.01% which had previously exclusively ordered jetliners from Boeing.
BlackBerry BBRY -0.52% rose in active trading after reports surfaced that several technology companies are looking at the smartphone maker for a potential takeover.
Write to Tomi Kilgore at tomi.kilgore@dowjones.com
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