Government Shutdown Fears Spark 128-Point Dow Sell-Off

Although we don't believe in timing the market or panicking over daily movements, we do like to keep an eye on market changes -- just in case they're material to our investing thesis.

Congress had a weekend to pull itself together and figure out a way to avoid a government shutdown before midnight tonight. But it looks like the federal government will be taking a leave of absence in just a few short hours.

Unless by some miracle lawmakers decide to pass a short-term spending bill this evening, nonessential sections of the government will close their doors for the first time in nearly two decades, a specter causing Wall Street to sell on fears of the economic ramifications. The Dow Jones Industrial Average (DJINDICES: ^DJI  ) fell 128 points, or 0.8%, to end at 15,129 on Monday.

Cisco Systems (NASDAQ: CSCO  ) was the only Dow component to notch any meaningful gains, and even those were paltry for the day's performance leader. Edging up just 0.4%, Wall Street bid the stock modestly higher before its ex-dividend date tomorrow. The small boost most likely reflects investors with very short time horizons: Owners of the stock today are allowed to sell it tomorrow and still get the company's next quarterly dividend payment. 

Sports apparel behemoth and Dow newcomer Nike (NYSE: NKE  ) ended up in the dredges of its new index Monday, losing 1.4%. Thankfully, today's performance isn't a reflection of Nike's business, which continues to print money across the globe. A 7% run-up at the end of last week after a blowout quarter, in addition to a weak consumer goods sector on Monday, gave the stock some room to fall.

United Technologies (NYSE: UTX  ) also lost 1.4%, which didn't help the average of the price-weighted Dow. United Tech, the seventh heaviest-weighted blue chip, declined despite just scoring more than $120 million in contracts from the Department of Defense on Friday. A cool $120 million deal should put any company on cloud nine, right? Unfortunately, that amount doesn't go quite as far as it once did, and investors may have been hoping for a larger slice of the nearly $11 billion in contracts the DOD awarded Friday. 

Lastly, Procter & Gamble (NYSE: PG  ) joins Nike as a laggard from the consumer goods sector. Shares of the $200 billion company dropped 2.1%, spoiled by rival Unilever's disappointing quarter. Citing emerging markets -- supposedly a source of great potential for these companies -- as projecting weakly into the future, Unilever sent shivers down the spines of P&G shareholders. 

What's a bigger nightmare than the budget? How about our debt?
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The Motley Fool's new free report, "Everything You Need to Know About the National Debt," walks you through with step-by-step explanations about how the government spends your money, where it gets tax revenue from, the future of spending, and what a $16 trillion debt means for our future. Click here to read the full report!


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